| Fund Company | Manulife Mutual Funds |
| Fund Type | Canadian Fixed Income Balanced |
| Rating | C |
| Style | Blend |
| Risk Level | Low – Medium |
| Load Status | Optional |
| RRSP/RRIF Suitability | Good |
| TFSA Suitability | Good |
| Manager | Terry Carr since December 2009 |
| MER | 2.34% |
| Code | MMF 4524 – Front End Units MMF 4724 – DSC Units |
| Minimum Investment | $500 |
Analysis: As the name suggests, this tactically managed fund invests in a wide range of yield producing securities including fixed income, high yield bonds, dividend paying equities, and REITs. It has a go anywhere mandate, and currently nearly half the fund is invested in the U.S., a third in Canada and the balance spread among a wide range of countries.
The asset mix is determined by reviewing, fundamental, market and economic variables.
The fixed income sleeve is managed using a multi factor approach that emphasizes sector, credit and security selection combined with active yield curve and duration management. The equity portion of the fund is focused on dividend paying securities. Stocks are selected using a value focused approach.
It pays a monthly distribution which is currently set at $0.05 per unit. At current prices, this works out to an annualized yield of approximately 6%.
The current asset mix is overweight high yield bonds, which currently make up nearly 50% of the fund. They are also overweight corporate bonds. The equity exposure is about neutral, sitting at around 24%, with Canadian and U.S. equities making up the majority. The focus is on quality companies trading at low valuations that pay a reasonably high dividend yield. All currency exposure is hedged.
Looking ahead, they are expecting continued volatility as a result of modest at best economic growth, U.S. fiscal issues and Europe. They continue to be positive on high yield, but are being selective in the space.
The performance has been decent, outpacing the category average in all time periods since the fund’s inception. Volatility has been reasonable.
This is not a cheap fund to own with an MER of 2.34%, putting it in the upper half of the category.
All in all it’s not a bad fund. It could be a decent option for more conservative oriented investors looking for tactically managed global income exposure. But given the significant exposure to high yield, there is more risk in the portfolio than historic performance would indicate.