Mawer Balanced Fund

Analysis: In a recent article, I picked the Mawer Balanced Fund (MAW 104) as the fund I would want to own in 2014, if I could only pick one fund. Thisfund of fund offering from Calgary based Mawer Investment Management gives you a bit of everything. It invests in other Mawer offered funds. At the end of November, it held just under 10% in cash, 29% in bonds, with the remaining 60% split pretty evenly between Canadian, U.S. and International equities.

Each of the underlying Mawer funds are top notch, except for maybe the U.S. equity fund, which has struggled to differentiate itself from the pack. Another potential drawback is that Mawer Canadian Bond Fund looks pretty similar to its index. While not necessarily a deal breaker, it only has about 40% in corporate bonds, which may cause some underperformance in a flat or rising yield environment, compared with a fund that has higher corporate bond exposure.

On balance, this is a pretty good looking portfolio. Each of the underlying funds are managed using Mawer’s disciplined, research driven, bottom up process that looks to find well managed, wealth creating companies that are trading at less than they are worth.

The results speak for themselves. Performance has consistently been above its benchmark and peer group for two main reasons. The first is the disciplined process that is used by the managers in the underlying funds. The second reason is cost. With an MER of 0.98%, it is one of the lowest priced balanced funds available.

As we enter 2014, I think that this fund will be a great fund to own for the year. While it may not shoot the lights out, I expect that it will deliver above average returns and still allow you to sleep comfortably at night.