| Fund Company | Dynamic Funds |
| Fund Type | Global Equity Balanced |
| Rating | $$$ |
| Style | Large Cap Value |
| Risk Level | Medium |
| Load Status | Optional |
| RRSP/RRIF Suitability | Good |
| TFSA Suitability | Good |
| Manager | David Fingold since May 2007 Michael McHugh since July 2010 |
| MER | 2.62% |
| Code | DYN 1660 – Front End Units DYN 1662 – DSC Units |
| Minimum Investment | $500 |
Analysis: Managed by the team of David Fingold and Michael McHugh, this fund has a go anywhere mandate that allows it to invest in fixed income and equity securities anywhere in the world. It is also free of any size or sector restrictions, allowing it to invest in companies of any size and are operating in any industry sector.
For the equity portion of the fund, stocks are selected using David Fingold’s bottom up approach which looks for companies that are attractively priced based on their growth opportunities.
The bond sleeve can invest in a wide range of fixed income securities including investment grade corporate bonds, high yield debt, sovereign bonds, emerging market debt, real return bonds, floating rate notes, and convertible bonds.
The overall asset mix is very actively managed and will vary widely depending on the managers’ view of the economy and other key factors within the market. They continually monitor the global economy looking for signals of an economic slowdown or a pickup in activity. When they notice a slowdown, they will move into cash and fixed income, while when signs of growth emerge, they will tilt the portfolio towards equities.
For example, in 2011 they started the year with 70% invested in equities. By September, the equity weighting had fallen to 25%, and by year-end, it had risen back to 46%. Portfolio turnover has been relatively high, averaging more than 100% for the past five years. Currently, the portfolio is conservatively positioned, holding 42% in U.S. equities, 38% foreign bonds, 15% in cash and 5% in foreign equity.
Performance has been strong relative to its peer group, with a three-year return of 11.4%, compared to the category median of 6.0%. Costs for the fund are higher than the average, carrying an MER of 2.62%. Another drawback to this fund is key person risk. Much of the equity management relies on the expertise of David Fingold. In the event that he were unable to continue to manage the fund, it is expected that performance of the fund would be potentially negatively affected.
It is our opinion that this fund may be a good core fund choice for medium risk investors who are looking for tactical way to play the global markets, without taking on the full risk associated with global equities.