This is essentially a fund of Beutel Goodman managed funds including Beutel Goodman Canadian Equity and Beutel Goodman Income. It invests in the American and International Equity Funds to gain its foreign equity exposure.
Mark Thomson, who also runs the Canadian Equity fund is responsible for the asset mix. It has a target mix of 40% bonds and 60% equities. It is not expected to stray too far from this mix, and any deviations will be based on the expected return opportunities within each of the underlying asset classes. At the end of May, it held about 30% in bonds, which is consistent with negative outlook for fixed income.
The bond sleeve is managed using a mix of top down macro analysis and bottom up security selection. The macro analysis helps the managers to set the mix and term structure of the bond sleeve. At the end of March, the duration was 1.2 years shorter than the FTSE TMX Canada Universe Index. About half the bond exposure was in corporate bonds, with the balance in government issues.
The equities are run using a disciplined, bottom up, value focused process that looks for well-managed, highly competitive companies that are trading at significant discounts to what they are really worth. They are conservative in their approach, with valuation metrics lower than the benchmark and peer group. It is underweight the volatile energy and materials sectors.
Performance has been quite strong, boasting top quartile performance across all periods. Volatility has been in line with its benchmark, and below its peers. If there is a drawback to this strategy, it is that it may underperform in a sharply rising market. In 2009, it gained 14.1%, trailing its peers by a wide margin. However, in 2008, it lost slightly more than half what the peer group did, making it much easier to recoup.
This is an excellent core balanced fund for advisors and do-it-yourself investors alike. The DIY series carries a 1.20%, and the advisor series, which pays a 1% trailer carries a higher MER of 1.99%.