| Fund Company | Beutel, Goodman & Company Ltd. |
| Fund Type | Canadian Equity Balanced |
| Rating | F |
| Style | Value |
| Risk Level | Low – Medium |
| Load Status | Front End |
| RRSP/RRIF Suitability | Good |
| TFSA Suitability | Good |
| Manager | Mark Thomson since September 2009
Bruce Corneil since May 1994 Gavin Ivory since February 2006 |
| MER | 1.21% |
| Code | BTG 772 – Front End Units |
| Minimum Investment | $5,000 |
Analysis:This equity focused balanced fund really struggled in 2009 and 2010, but has been very strong since then. For the year ending January 31, it gained 14.1%, leading both the benchmark and its competitors.
The portfolio is really just a mix of other Beutel managed funds including the Beutel Goodman Income Fund, Beutel Goodman Canadian Equity, Beutel Goodman International Equity and Buetel Goodman American Equity.
The asset mix is weighted towards equities, with a neutral mix set at 40% bonds, 60% equities. At the end of January, it had 28% invested in bonds, 6% in cash with the balance in equities. They are pretty consistent with this asset mix, and it hasn’t changed considerably in the past few years.
On the equity side, they look for companies that have a history of generating above average free cash flows that are trading at a discount to their estimate of intrinsic value. They tend to favour companies that are more defensively positioned. They are currently overweight consumer focused names, and communication stocks, and are significantly underweight in energy, materials and real estate.
Within the fixed income portion of the fund, they focus on building a portfolio of high quality corporate bonds that has a yield that is higher than the DEX Universe benchmark. The team determines an overall outlook for the economy, including the direction of interest rates, credit spreads and the yield curve and positions the portfolio opportunistically to benefit from this outlook.
While the five year return has been largely disappointing, I am somewhat encouraged by the shorter term numbers. Another very positive attribute of this fund is its 1.21% MER, which is one of the lowest in the category.
Still, I believe that there are better balanced funds available. There are some concerns with a couple of the underlying funds, particularly the International Equity and the Income Fund. I would recommend the Mawer Balanced Fund over this offering.