| Fund Company | Mackenzie Financial Corporation |
| Fund Type | Health Care Equity |
| Rating | $$ |
| Style | Growth |
| Risk Level | High |
| Load Status | Optional |
| RRSP/RRIF Suitability | Poor |
| TFSA Suitability | Poor |
| Manager | Ian Ainsworth since January 2012 |
| MER | 2.57% |
| Code | MFC 1040 – Front End Units MFC 1190 – DSC Units |
| Minimum Investment | $500 |
Analysis: Ian Ainsworth took over the lead managerial duties of the fund, after long serving manager Wendy Chua resigned from Mackenzie in January of this year. Mr. Ainsworth, an industry veteran, has more than 30 years of investment industry experience under his belt. He has been co-manager on this fund since 2005. In addition to this fund, he is the Co-Lead of Mackenzie’s Growth Team and manages other Mackenzie funds including the Mackenzie Growth Fund and the Mackenzie Founders Fund. He will be supported on this fund by the Mackenzie Growth Team
In managing the fund, Mr. Ainsworth will use a fundamentally driven, bottom up, growth focused approach looking for companies that operate in the pharmaceutical, biotech, healthcare services, medical information and devices sectors. The portfolio is concentrated, holding between 25 and 35 names. The top 10 currently make up more than 60% of the fund. The portfolio turnover is modest, averaging 66% in the past five years.
Despite having a go anywhere mandate and the ability to invest in companies of any size, the fund tends to be heavily weighted in U.S. mid cap stocks, which explains why this is one of the most volatile funds in the category. It also explains why many of the names are not exactly household names, with Shire PLC, Catalyst Health Solutions and Onyx Pharmaceuticals being the top three at March 31.
The long term story for healthcare is a very strong one, as an aging population, increased healthcare spending and new breakthrough drugs and medical products are creating exciting investment opportunities. But it is not without risks. There is an overhang of uncertainty in the sector, as we await the ruling by the U.S. Supreme Court on the constitutionality of “Obamacare”. There are also worries that austerity measure, both in the U.S. and around the globe will curtail healthcare spending.
Healthcare also tends to be a reasonably good defensive sector in periods of market volatility. Our biggest concerns with this fund are the recent change in the management team, the fund’s emphasis on small and mid cap names, and the higher than average volatility. Instead, we prefer the CI Global Health Sciences or the TD Health Sciences to this fund.