Mutual Fund Updates

Pender Small Cap Opportunities Fund

As a whole, Canadian small caps appear to be overvalued relative to their large-cap brethren. However, there are still a number of attractive opportunities available on a company-by-company basis. David Barr looks to take advantage of the inefficiencies within the small cap market and build a portfolio of well-managed businesses that have strong competitive positions that have been overlooked by the market.

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Dynamic Global Asset Allocation Fund

Managed by the team of David Fingold and Michael McHugh, this fund has a go anywhere mandate that allows it to invest in fixed income and equity securities anywhere in the world. It is also free of any size or sector restrictions, allowing it to invest in companies of any size and are operating in any industry sector.

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Mackenzie Sentinel Real Return Bond Fund

The Mackenzie Sentinel Real Return Bond Fund is designed to provide a steady flow of income will provide investors with a hedge against inflation. To do this, it invests in real return bonds issued by the Government of Canada and the province of Québec. It also can invest in real return bonds issued by foreign governments.

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Scotia Global Bond Fund

With a gain of 7.2% the Scotia Global Bond Fund was one of the top performing mutual funds in May. Nicholas Van Sluytman took over the reins of this fund in January 2010 and has rewarded investors with strong returns, gaining 7.5% in the past two years. In comparison, the Citigroup World Government Bond Index Fund gained 6.9% during the same period.

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Sentry REIT Fund

The Sentry REIT Fund is one of a few options that mutual fund investors have when looking for exposure to REITs. There are a number of funds that are focused on real estate, but most of those invest more in operating companies as opposed to REITs. For example, as of May 31, the Sentry REIT Fund held 78% in REITs while the CIBC Canadian Real Estate Fund held only 39% of its assets in REITs.

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CI Signature Income & Growth Fund

Normally we are big fans of the funds managed by CI’s Signature Global Advisors. However, we are less than enamored with this fund. It’s not that it’s a bad fund; it’s just not outstanding. The long-term performance is quite impressive. As of May 31, the fund posted an average ten-year return of 6.1%, handily outpacing the benchmark’s 2.5% gain during the same period. Shorter term it has struggled, losing 4.5% in the past year while the benchmark gained 0.9%.

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