| Fund Company | CIBC Asset Management |
| Fund Type | U.S. Equity |
| Rating | A |
| Style | Large Cap Growth |
| Risk Level | Medium High |
| Load Status | No Load |
| RRSP/RRIF Suitability | Good |
| TFSA Suitability | Fair |
| Manager | Patrick Thillou since August 2005 |
| MER | 1.26% |
| Code | CIB 520 – No Load Units |
| Minimum Investment | $500 |
Analysis: U.S. growth stocks have definitely been the big winners over the past couple of years. This fund provides exposure to them by replicating the NASDAQ 100 Index, which is made up of the 100 largest non-financial companies that trade on the NASDAQ. It includes NASDAQ’s largest companies across major industry groups, including computer hardware and software, telecommunications, retail/wholesale trade, and biotechnology.
At the end of November, it had nearly 60% invested in technology, 20% in consumer names, 15% in healthcare, and the rest in industrials and communications. It had zero exposure to energy, financials, materials or utilities, which could make this a very nice compliment to the S&P/TSX Composite Index, which is heavy in those sectors. The top holdings are littered with household tech names including Apple, Microsoft, Google, and Facebook.
Because it is an index fund, it has very low levels of turnover. It is rebalanced and reconstituted on an annual basis Last year, turnover was approximately 17%.
The index is cap weighted, meaning that the bigger the company, the higher the weighting in the fund.
Despite having a higher MER than the NASDAQ index funds offered by TD or Scotia, this version has slightly outperformed over the past ten year period.
The fund does not hedge currency exposure, which has definitely helped to boost returns when compared to the TD version, which does hedge.
Recent volatility has been lower than average, but given the concentrated nature of the portfolio, I expect volatility to be higher, over the long term. While it was the top performer this year, it is not inconceivable that it could be near the bottom of performance, if tech hits a rough patch.
Given that, I would be very reluctant to recommend it as a core U.S. equity holding for most investors, given this potential for above average volatility. Instead, I see it as a compliment to a more traditional U.S. equity fund. It could serve as a core holding for those with an above average appetite for risk.