| Fund Company | Phillips Hager & North Investment Management |
| Fund Type | International Equity |
| Rating | D |
| Style | Value |
| Risk Level | Medium |
| Load Status | No Load / Optional |
| RRSP/RRIF Suitability | Fair |
| TFSA Suitability | Fair |
| Manager | Jennifer Witterick since September 2004 |
| MER | 1.39% Series D, 2.21% Advisor Series |
| Code | PHN 410 – No Load Units PHN 6140 – Front End Units |
| Minimum Investment | $5,000 |
Analysis: PH&N is one of those shops where the vast majority of their funds tend to be high quality investments, offering decent returns and reasonable volatility at a fair price. Unfortunately this fund isn’t one of those.
It invests in a diversified portfolio of companies located outside of North America. The manager follows a value focused approach that looks to find companies that offer good value at their current prices. A typical company in the portfolio will what they believe to be industry leaders with strong management teams that have delivered high levels of profitability and earnings growth.
It is built on a stock by stock basis and currently holds 66 names with the top ten making up slightly more than a third of the fund. Their investment process is quite active, with portfolio turnover averaging more than 80% per year over the past five years.
The current positioning is fairly defensive, with exposure to pharmaceuticals and telecom, which helps offset an overweight position in the energy sector. Despite this, performance has largely disappointed. For the three years ending June 30, it has gained an average of 3.4% per year, dramatically underperforming the MSCI EAFE Index and its peer group. At the same time, volatility has been a bit higher than the index.
The costs are reasonable with an MER of 1.39%. But when you factor in the disappointing performance, the cost is largely irrelevant. At this point, I cannot recommend this fund. I believe that there are much better international funds available, including offerings from Mawer, National Bank and Renaissance.