| Fund Company | CI Investments |
| Fund Type | Canadian Focused Equity |
| Rating | C |
| Style | Large Cap Blend |
| Risk Level | Medium |
| Load Status | Optional |
| RRSP/RRIF Suitability | Good |
| TFSA Suitability | Good |
| Manager | Stephen Jenkins since June 1997 Gerry Coleman since June 1997 |
| MER | 2.43% |
| Code | CIG 690 – Front End Units CIG 890 – DSC Units |
| Minimum Investment | $500 |
Analysis: With more than $6 billion invested in the mandate, the CI Harbour Fund is easily considered the flagship fund for the Harbour Advisors Group. Since its 1997 launch, the fund has been managed by respected industry veteran, Gerry Coleman. However in December, at Mr. Coleman’s request, portfolio duties were reassigned to Stephen Jenkins who will take on the lead manager role. He was also promoted to Co Chief Investment Officer of the firm.
With these changes, there is not expected to be any meaningful change to the investment process that is used on the fund. It will remain a patient, bottom up and research intensive approach that invests in concentrated portfolios of approximately 40 names. They will continue to look for industry leading companies with strong balance sheets and sustainable competitive advantages that can generate significant free cash flows. They will look for good management teams who have proven that they are good allocators of capital with an eye for creating shareholder value. Once they find these opportunities, they must be trading at an attractive discount to their estimate of intrinsic value, so there is a margin of safety for investors. Ideally, they are looking for a discount of at least 50%. Cash will still be used tactically when no investment opportunities that meet the manager’s criteria are available.
Having served as Mr. Coleman’s back up manager on the fund, Mr. Jenkins is well versed on all of the names in the fund. It is not expected that there will be much in the way of significant turnover. There may be some changes around the periphery of the fund, but the core holdings are expected to remain intact. Any changes are expected to be implemented gradually.
One comment that the managers made in a recent conference call is that there is a chance that the fund may become a touch more value focused under Mr. Jenkins’ management. It was noted that historically that Mr. Jenkins has been more value driven in his approach than Mr. Coleman, who may sometimes pay up for a name that has good growth prospects.
Considering on our analysis, we believe that this move will be neutral to investors. Mr. Jenkins is a respected manager and is well versed in the Harbour team’s approach and process. However, we will continue to monitor the fund closely to see if there is any material change to the fund or its risk reward characteristics.