| Fund Company | Jarislowsky Fraser Ltd. |
| Fund Type | Canadian Focused Equity |
| Rating | B |
| Style | Blend |
| Risk Level | Medium |
| Load Status | Optional |
| RRSP/RRIF Suitability | Good |
| TFSA Suitability | Good |
| Manager | Margot Ritchie since October 2010
Helen Beck since November 2012 Charles Nadim since November 2012 |
| MER | 2.16% |
| Code | NBC 3402 – Front End Units
NBC 3602 – Low Load Units |
| Minimum Investment | $500 |
Analysis: With roots dating back to 1955, Jarislowsky Fraser is one of the oldest and highly respected investment management firms in Canada. Until recently, they did not offer any mutual funds directly to investors under their own banner, until recently with the launch of three funds in October 2010.
This Canadian focused equity offering invests mainly in large, industry leading companies that have strong management teams and a track record of earnings and limited financial leverage. The managers rely heavily on the firm’s in-house equity team, and use a top-down and bottom up economic analysis with a focus on long-term investment themes to help identify the most attractive areas of the market. They believe this allows them to find companies that have long-term, stable earnings prospects.
When evaluating a specific investment, the managers use a fundamentally driven, bottom up analytical process that relies heavily on meetings with company management. Philosophically, their approach is more “growth at a reasonable price.” There are four key criteria that must be met before a company can be added to the portfolio. They are: strong management, sustainable growth in earnings and cash flow, sound balance sheets, and reasonable valuations. This approach is very patient, with low levels of portfolio turnover.
Since its launch, the performance of this fund has been quite strong, with a three year annualized return of 14%, outpacing both the S&P/TSX Composite and most of its peer group. It has also been significantly less volatile than both the index and its peers. It has also done a great job at protecting capital. For the three years ending August 31, it has experienced less than 40% of the downside movements of the TSX.
Another thing going for this fund is its cost. It has an MER of 2.16%, which is well below the average for a Canadian equity fund. This is certainly a fund to take a look at. It has a strong management team at the helm, following a process that has been in place for decades, all at a reasonable price. This can be a great core holding for most investors.