| Fund Company | CIBC Asset Management |
| Fund Type | Global Equity |
| Rating | C |
| Style | Blend |
| Risk Level | Medium |
| Load Status | Optional |
| RRSP/RRIF Suitability | Excellent |
| TFSA Suitability | Excellent |
| Manager | David Winters since October 2006 |
| MER | 2.68% |
| Code | ATL 1029 – Front End Units ATL 1873 – DSC Units |
| Minimum Investment | $500 |
Analysis: Despite dramatically underperforming the MSCI World Index in 2012, this go anywhere global equity fund can be a great core holding for most investors. Much of the underperformance can be traced to the fund’s underweight exposure in banks, technology, telecom and healthcare. It was these sectors that led the way higher in 2012 and so far in 2013. Still, David Winters believes that the best long term opportunities are outside of these sectors.
Remaining true to his style, Mr. Winters uses a value tilted approach, looking for strong businesses which offer an identified competitive advantage and a strong management that are trading at a discount to its intrinsic value. The investment process is very much a bottom up approach and they generally take a long term, patient view when evaluating a stock. This is reflected in the fund’s portfolio turnover, which is approximately 30%.
The portfolio tends to be fairly concentrated, holding less than 40 names with the top 10 making up roughly half the fund. It is benchmark agnostic, allowing the manager to be able to take significant sector bets when the risk reward trade-off warrants it. Cash is a by-product of the stock selection process. As of January 31, cash was approximately 13% of the fund, down from recent months as some high quality, out of favour opportunities have emerged. The recent rally has made finding opportunities more challenging, but he believes that they are available off the beaten track.
Geographically, the fund is invested heavily in the U.S. and Canada, which combined make up less than half the fund. While avoiding direct exposure to the troubled euro zone, the fund has a 21% weighting in Switzerland and 9% in the UK.
The most recent MER for the fund is 2.68%, which while down from a year ago, is still higher than the category average. Another concern stems from the concentration. Concentration can be a double edged sword, helping to amplify gains, but can also amplify losses as stock specific risk increases in a more concentrated portfolio. The largest holding makes up nearly 10% of the fund.
The fund is heavily focused on tobacco stocks. The investment rationale is that the tobacco companies generate significant cash flow to investors. However, for those following an ethical screen in their portfolios will want to avoid this fund.
Another risk of the fund is key person risk, as most of the heavy lifting is done by David Winters. Were something to happen to him, investors would be impacted significantly.