| Fund Company | Manulife Mutual Funds |
|---|---|
| Fund Type | Global Equity |
| Rating | B |
| Style | Large Cap Blend |
| Risk Level | Medium |
| Load Status | Optional |
| RRSP/RRIF Suitability | Excellent |
| Manager | Craig Noble since May 2008 |
| MER | 2.80% |
| Fund Code | MMF 8584 ? Front End Units |
| MMF 8484 ? DSC Units | |
| Minimum Investment | $500 |
| Minimum Investment | $500 |
Analysis: Over the past decade, many large pension funds have been making significant investments in infrastructure projects to help better diversify their portfolios, reduce the risk of capital losses and in many cases, hedge against potential inflation. This enthusiasm has started to gain some traction with retail investors with a number of infrastructure mutual funds and ETFs available.
Infrastructure investments make a fairly compelling investment because it offers long term stable cash flows that are often adjusted to inflation, low risk of loss of capital, and potentially attractive risk adjusted returns.
One of the more interesting options in the space is the Manulife Global Infrastructure Fund, managed by a team headed up by Craig Noble at Brookfield Investment Management. Brookfield is one of the recognized leaders in the infrastructure investing space.
The investment process is a mix of top down macro analysis and bottom up company selection. The top down process is used to identify potential investment themes and starts with a detailed economic outlook that is used to provide an understanding of which industries, countries and themes are expected to do well. This helps the team narrow down the companies on which they will do a more detailed fundamental analysis that evaluates the quality of the balance sheet, free cash flow generation, and valuation.
The portfolio tends to be well diversified, holding about 50 names from around the world. Given the nature of infrastructure holdings, the portfolio is concentrated in utilities, energy, and industrials, which combined make up nearly 85% of the fund.
Performance has been decent. For the three years ending February 28, the fund gained an annualized 18.1%. In comparison, the more broadly focused MSCI World Index gained more than 23%. Volatility has been lower than both the index and many other global equity funds. But what really makes this an attractive piece of a well-diversified portfolio is the downside protection it offers. For the past three and five years, it has participated in approximately two-thirds of the upside of the global equity markets. However, it has been flat to positive when markets are falling.
Given the management team behind it, this is a great option for investors looking for infrastructure exposure in their portfolios.