| Fund Company | Capital International Asset Management |
| Fund Type | Global Equity |
| Rating | B |
| Style | Blend |
| Risk Level | Medium |
| Load Status | Optional |
| RRSP/RRIF Suitability | Excellent |
| TFSA Suitability | Excellent |
| Manager | Galen Hoskin since August 2012
Carl Kawaja since November 2002 Dina Perry since November 2002 |
| MER | 2.11% |
| Code | CIF 843 – Front End Units
CIF 863 – Low Load Units |
| Minimum Investment | $500 |
Analysis: This global equity fund is managed using a unique, multi-manager approach, with different managers responsible for portions of the fund, independent of each other. Running the show with this fund are Carl Kawaja, Dina Perry, and Galen Hoskin. Also contributing to the fund is a team of about 30 analysts who are responsible for about a quarter of the names. The total portfolio will have about 200 names, with the top ten making up less than 15%.
The overall portfolio is monitored by Mr. Kawaja who ensures there is no undue concentration within the fund. To help with this, there are a number of controls in place, including a maximum weight of any position of 5%, with a maximum sector weight of 25%.
Each manager has a unique, yet complimentary investment approach, including contrarian value, growth and a more tactical, opportunistic style. Regardless of the style, the research process is strictly bottom up, fundamentally driven. The process is patient and long term focused. A significant portion of the manager’s pay cheque is based on their performance over an eight year period, allowing the managers to focus on the big picture drivers of equity returns, rather than short term noise. The managers spend a significant time on the road meeting with the companies they are following.
The sector mix and geographic allocation is the byproduct of stock selection process. It is currently overweight Europe and Asia, and underweight the U.S. From a sector standpoint, it is overweight consumer cyclicals and technology, and are underweight financials, real estate and utilities. While the process is largely bottom up, many of the companies in the funds are benefitting from a number of key macro drivers, including the emergence of affluent consumers in developing countries, the popularity of mobile computing, and healthcare innovation.
Performance has been strong. For the five years ending May 31, it gained an annualized 14.6%, outpacing much of its competition, but lagging the MSCI World Index. Volatility has been in line with the broader market. The costs are reasonable, with an MER of 2.11% for the front end version of the fund.
On balance, this is a great core global equity fund. Very strong team behind it, proven process, and a reasonable cost. I would expect that it will continue to consistently be one of the better performing global equity funds over time.