| Fund Company | CI Investments Inc. |
| Fund Type | Global Neutral Balanced |
| Rating | B |
| Style | Large Cap Blend |
| Risk Level | Medium |
| Load Status | Optional |
| RRSP/RRIF Suitability | Excellent |
| TFSA Suitability | Excellent |
| Manager | Ryan Fitzgerald since December 2010 Geof Marshall since December 2010 |
| MER | 1.60% |
| Code | CIG 686 – Front End Units CIG 786 – DSC Units |
| Minimum Investment | $500 |
Analysis: Managed by Eric Bushell and his Signature Team, the fund has the objective of generating a high level of income and long-term capital growth. This is a fund that has excelled at both. It pays investors a monthly distribution of $0.07 per unit, which works out to an annualized yield of approximately 6.1% at current prices. Investors have also been rewarded with strong first quartile performance from the fund since its inception.
The fund invests in a balanced portfolio of high yielding equity securities and a mix of Canadian fixed income, the bulk of which will be corporate bonds. The approach used is very collaborative and style agnostic. When reviewing any investment candidate, the Signature team reviews the entire capital structure of a company to get a more complete view of the company. They also pay attention to many qualitative aspects of the company such as management, disclosure and governance. The team also develops a comprehensive outlook for economic growth, interest rates, capital market conditions and geopolitical tensions which helps identify the asset classes and sectors which are most likely to benefit.
As of December 31, the fund held nearly 60% in cash and fixed income and 30% in high yielding Canadian securities such as REITs and energy trusts. On the surface, this appears to be a fairly conservative mix. However, looking at the makeup of the fixed income sleeve, there is a significant weighting in corporate and some high yield exposure. While this mix will outperform in a flat or rising rate environment, the lack of government bond exposure could result in bigger drawdowns, similar to what happened to the fund in 2008.
Despite that, longer-term performance has been stellar, outperforming the benchmark and peer group over all time periods since the fund’s inception. One drawback is that it is more volatile than other funds in the category.
The fund carries a low MER of 1.61%. This is a great fund for most investors, as it is relatively conservative yet offers a high income yield and strong growth potential.
Considering this, it is our opinion that this may be a good fund for investors who are looking for a fund that can deliver a decent yield and solid risk adjusted returns over the long term. However, investors should be aware that this fund might be prone to periods of higher volatility.