| Fund Company | Manulife Mutual Funds |
| Fund Type | Global Equity |
| Rating | A |
| Style | Blend |
| Risk Level | Medium |
| Load Status | Optional |
| RRSP/RRIF Suitability | Excellent |
| TFSA Suitability | Excellent |
| Manager | Paul Moroz since November 2009
James Hall since November 2009 |
| MER | 2.75% |
| Code | MMF 4506 – Front End Units
MMF 4406 – DSC Units |
| Minimum Investment | $500 |
Analysis: This Manulife offering is a virtual copy of the highly regarded Mawer Global Equity Fund. The main differences would be that it has a $500 minimum, compared with $5,000 for the Mawer offering, and it carries an MER that is 130 basis points higher. Even with the higher cost, this still rates as one of the better global equity funds around.
Like its Mawer counterpart, it is managed by the team of Jim Hall and Paul Moroz. It has a go anywhere mandate, and looks for wealth-creating businesses with competent management and long-term competitive advantages that are trading at a reasonable price. They use a very patient, long term focused, research-driven, bottom-up security selection process.
The portfolio is nearly identical to Mawer, holding approximately 70 stocks, with the top ten making up about 30%. It is overweight in industrials and financials, and significantly underweight in consumer focused names.
They tend to take a longer term outlook when looking at a company. This is reflected in the fund’s very low level of portfolio turnover. It has averaged less than 20% per year since its launch.
Performance has been very strong, but not surprisingly, with the higher cost, has lagged the Mawer offering. For the three years ending March 31, the fund has gained an annualized 16.3%, compared with 17.8% for Mawer. Both the fund’s volatility and downside protection numbers are much better than its peer group.
The fund is also part of Manulife’s corporate class structure, which may make it more attractive in taxable accounts. Still, my preference would be to buy the Mawer fund directly, this is a great substitute for those who are unable to do so. With its go anywhere mandate and bottom up portfolio construction approach, there may be periods of time where performance lags the peer group and benchmark. However, given the strength, reputation and process of the manager, I would expect that this fund will continue to deliver above average returns with below average risk for investors over the long term.