| Fund Company | Brandes Investment Partners Co. |
| Fund Type | Global Small / Mid Cap Equity |
| Rating | B |
| Style | Small Cap Value |
| Risk Level | High |
| Load Status | Optional |
| RRSP/RRIF Suitability | Fair |
| TFSA Suitability | Fair |
| Manager | Brandes Management Team |
| MER | 2.70% |
| Code | BIP 152 – Front End Units BIP 252 – DSC Units |
| Minimum Investment | $500 |
Analysis: Managed by the Brandes Investment Committee using a bottom up, Graham and Dodd, value focused approach, this global focused small / mid cap fund is looking to build a diversified portfolio of businesses that are trading below their estimate of true value. As of September 30, the fund held 73 names with the top ten making up just under 30% of the fund.
Given the fact that the portfolio is built on a stock-by-stock basis, sector weights are the by-product of stock selection, which means that the portfolio will quite often look dramatically different from its benchmark index. That does not mean that there aren’t risk controls in place, quite the contrary. For example, the maximum weight of any one security in the portfolio will be capped at 5%, and sector weights cannot exceed the great of 20% of the fund or 150% of the index. It can also invest up to 20% of the fund in emerging markets.
Performance has been very strong, gaining 34% in 2012 and has an annualized five-year return of 4.1%, handily outpacing the benchmark and most of the peer group. A drawback is that it is more volatile than the category average and the benchmark. As a result, it is susceptible to big drawdowns in falling markets as evidenced by performance in 2011, 2008 and 2007 when it underperformed the index.
This is not a fund for everybody. In our opinion, it is only suitable those able to accept the higher volatility of this fund. However, we believe that it has the potential to earn strong risk adjusted returns over the long term.