| Fund Company | Fidelity Investments |
| Fund Type | Canadian Equity Balanced |
| Rating | F |
| Style | Blend |
| Risk Level | Medium |
| Load Status | Optional |
| RRSP/RRIF Suitability | Fair |
| TFSA Suitability | Fair |
| Manager | Derek Young since March 2009
Geoff Stein since April 2011 |
| MER | 2.26% |
| Code | FID 281 – Front End Units
FID 581 – DSC Units |
| Minimum Investment | $500 |
Analysis: This is a fund that I really want to like, but it just hasn’t been able to come back to what it once was. Despite some small glimmers here and there, it just hasn’t been the same since Alan Radlo left Fidelity in 2009.
Today, it is set up like a fund of funds where Geoffrey Stein & Derek Young invest in various sub portfolios managed by other Fidelity managers. They have the ability to be quite tactical in their approach and the asset mix is based on their view of the market conditions. The target asset mix of the fund is set at 65% equity, 30% bonds, and 5% in cash. At the end of November, it held 64% in equity, 30% in bonds, and 6% in cash.
Geographically the focus is in Canada, where 71% of the portfolio is held, while 23% is invested in the U.S. The equities tend to be focused on some pretty well-known names including TD Bank, Royal Bank, and Shoppers Drug Mart.
Within the fixed income sleeve, most of the emphasis is on investment grade bonds, with some exposure to high yield. It is tilted towards corporate bonds, with only 40% of the bond allocation invested in government bonds. This should help to reduce the duration risk of the portfolio.
Performance has been disappointing, and has underperformed since 2010. For the three years ending December 31, it has an annualized return of 2.3%, which is less than half the return of the benchmark and the peer group. Volatility has been in line with both the benchmark and the peer group.
Sadly, I don’t expect to see this fund return to its former glory any time soon. In my opinion, there are many better options available, and within the Fidelity family, my pick would be the Fidelity Monthly Income Fund (FID 269).