| Fund Company | Manulife Mutual Funds |
| Fund Type | Canadian Neutral Balanced |
| Rating | A |
| Style | Large Cap Blend |
| Risk Level | Low – Medium |
| Load Status | Optional |
| RRSP/RRIF Suitability | Excellent |
| Manager | Alan Wicks since Sept 1997 |
| Jonathan Popper since Sept 1997 | |
| MER | 2.11% |
| Fund Code | MMF 583 – Front End Units |
| MMF 483 – DSC Units | |
| Minimum Investment | $500 |
Analysis: This is a fund that has been on my radar for a few quarters, and I recently had the chance to review it in more detail. It is a Canadian neutral balanced fund that has been managed by the team of Alan Wicks and Jonathan Popper since its inception in 1997.
The equity approach is rooted in a value philosophy that looks for businesses that generate high and sustainable profits that are trading at attractive valuations. Their process favours companies that have high barriers to entry, strong market share, and a high return on assets. They like management teams that have a demonstrated history of prudent capital allocation and strong corporate governance policies.
The fixed income sleeve is managed using a combination top down economic review combined with a bottom up credit analysis. The process looks to generate returns by focusing on sector allocation, credit quality and individual credit selection. They also emphasize risk management by managing the portfolios yield curve and duration exposure.
At the end of December it held 15% in cash, 35% in Canadian equities, 30% in U.S. equities and 20% in bonds. The equity sleeve is defensively positioned with consumer names making up 30%. It is dramatically underweight energy, materials, and financials which results in a portfolio that is dramatically different than the index.
Performance, particularly since 2011, has been excellent, posting an annualized three year return of 13.2% to the end of December. Perhaps even more impressive has been the volatility profile, which has been below both the benchmark and the category average. It has also done a great job at protecting capital in down markets.
The lack of exposure to Europe and Asia is expected to help keep volatility in check, however, if a rally does take hold in Europe, it may lag some of its peers. The fixed income portion of the fund is defensively positioned and expected to hold up relatively well when rates do start to move higher.
I see this as a great one ticket solution.