| Fund Company | Mackenzie Financial Corporation |
| Fund Type | Global Equity |
| Rating | B |
| Style | Blend |
| Risk Level | Medium |
| Load Status | Optional |
| RRSP/RRIF Suitability | Excellent |
| TFSA Suitability | Excellent |
| Manager | Paul Musson since January 2001 Matt Moody since January 2009 |
| MER | 2.60% |
| Code | MFC 081 – Front End Units MFC 611 – DSC Units |
| Minimum Investment | $500 |
Analysis: The main reason that we like this fund is that it holds up well in volatile markets. Management has definitely been earning their keep of late, with the fund gaining 15.1% in the first half of 2013. With volatility expected to remain high for the next little while, this fund will continue to be at the top of our list for global equity picks.
It is a concentrated portfolio of high quality companies from around the world with strong balance sheet and excellent management teams that are trading at a reasonable valuation. They are very patient in their approach as evidenced by their low levels of portfolio turnover. For the most recent five year period, it has averaged less than 20% per year.
With its emphasis on capital preservation, it is not surprising to see the fund very defensively positioned. As of April 30, it was very heavily overweight in consumer staples and consumer discretionary, which combined make up more than half of the fund. Currency is not hedged, which will hurt the fund when the Canadian dollar is appreciating, but will boost performance when the Canadian dollar is declining.
Performance, particularly on a risk adjusted basis has been strong. For the five years ending June 30, the fund gain an average 6.8% per year while the index gained only 4.0%. Perhaps more impressive is that this return was generated with a level of volatility that was significantly lower than both the index and its peer group.
The biggest knock on this fund is that it will very likely underperform during a significant market run up. Given our expectation for continued volatility, this is a fund that will serve most investors well until things settle down. Within the context of a portfolio, it is our opinion that this fund is a great core global equity holding for most investors. Those with a higher risk tolerance may want to look at a more aggressive global fund for the better upside participation when markets do rally higher.