| Fund Company | Mackenzie Financial Corporation |
| Fund Type | European Equity |
| Rating | $$$ |
| Style | Growth at a Reasonable Price |
| Risk Level | Medium |
| Load Status | Optional |
| RRSP/RRIF Suitability | Fair |
| TFSA Suitability | Fair |
| Manager | Paul Musson since November 2002 Matt Moody since May 2008 |
| MER | 2.63% |
| Code | MFC 1565 – Front End Units MFC 1808 – DSC Units |
| Minimum Investment | $500 |
Analysis: This is by far our most conservative pick of the European equity group and like all funds that carry the Ivy banner, it avoids highly levered companies and banks with complicated structures. Instead, they look for stable companies with clean balance sheets, good management, healthy profitability and sustainable competitive strengths. The portfolio itself is fairly concentrated holding approximately 20 names. While the characteristics may indicate that this is a value fund, valuation is considered only after the quality of a business has been determined.
It is defensively positioned with very little exposure to cyclical businesses and holds around 9% in cash. Because of this, it is expected to lag when markets move sharply higher. For example, as of October 31, the MSCI Europe Index gained 11.6% in Canadian dollar terms, while this fund gained 5.9%, lagging its peer group.
This is our top pick for one reason – quality. It invests only in quality companies and as a result is much less volatile and will hold its value much better in periods of extreme market volatility. Case in point, the index is down 4.7% over the past five years, yet this fund has generated a positive return of 2% in the same period. Given that much headline risk remains in Europe, this fund should hold up well for investors looking to make baby steps into the region.