| Fund Company | National Bank Securities Inc. |
| Fund Type | Global Equity |
| Rating | F |
| Style | Growth |
| Risk Level | Medium |
| Load Status | Optional |
| RRSP/RRIF Suitability | Good |
| TFSA Suitability | Good |
| Manager | Nadim Rizk since April 2012 Andrew Chan since April 2012 |
| MER | 2.62% |
| Code | NBC 867 – No Load Units NBC 467 – Front End Units NBC 567 – DSC Units |
| Minimum Investment | $500 |
Analysis: Since the new management team of Nadim Rizk and Andrew Chan of Fiera Capital took over this fund a little more than a year ago, the performance has definitely turned around. It had previously been a laggard, and was perennially in the bottom half of the category, while lately it has been firmly in the upper half of the category.
This improvement is the result of the investment process that Mr. Rizk has been using since 2006. With it, he looks for best of breed companies with strong growth potential that are trading at reasonable valuations. They look for companies that have sustainable competitive advantages operating in industries with high barriers to entry. The like well managed companies that have pricing power and that can deliver organic growth, irrespective of the general economy.
It is an all cap, go anywhere mandate that relies on basic screens focusing on quality, valuation and growth measures to help identify potential investment candidates. Once identified, they conduct a detailed fundamental analysis focusing on both company and industry factors that help them determine their estimate of the intrinsic value of the company. Once that is known, they look for companies that offer a minimum return of at least 50% over the next three years. They are benchmark agnostic and the country and sector weights are a byproduct of their stock selection process.
The portfolio is a concentrated, yet diversified portfolio that will typically hold between 40 and 60 names. At the end of May, it held 44 positions with the top ten making up 30% of the fund. They typically take a long term view when analyzing a stock, so it is expected that portfolio turnover will be modest.
We definitely like the direction that this fund is headed. While one year is far too short of a history on which to judge performance, the manager in fact has a much longer track record. He has been managing global equities since 2006. When we reviewed his global equity composite track record for the past five years, adjusting for the cost differential between the fund and composite, we found that it would have ranked in the top ten of all global equity funds in our coverage universe. Considering the above, it is our opinion that this is a global equity fund that you will want to watch. We expect that it will provide strong risk adjusted returns with a level of volatility that is in line with the broader market.