Recommended List of Mutual Funds – October 2016
Capital Group U.S. Equity Fund (CIF 847 – Front End Units, CIF 867 – Low Load Units) – Historically, the U.S. equity market has been one of the most difficult to outperform, making picking an actively managed fund in the category rather difficult. More often than not, you’re better off just going with a low-cost index product for your U.S. equity exposure.
One fund that has grabbed my interest of late is the Capital Group U.S. Equity Fund, offered through the U.S. based Capital Group’s Canadian division. While the fund is only publishing a track record of just under three years in Canada, it is now modeled after the firm’s oldest portfolio, the Investment Company of America, a fund that was launched in 1933, and boasts a strong track record of performance.
Read MoreETF Focus List – September 2016
Additions
Vanguard Canadian Short Term Bond Index ETF (TSX: VSB) – This TSX traded ETF provides exposure to a portfolio of Canadian government and corporate bonds, that have a maturity that ranges between one and five years. It looks to track, on a net of fee basis, the performance of the Barclays Global Aggregate Canadian Government/Credit 1–5-year Float Adjusted Bond Index. The index is weighted by market capitalization.
Credit quality is high, with more than 55% of the fund rated AAA, 25% rated AA, and the balance A or BBB. Approximately 70% is invested in government or agency debt, with the balance being in corporate bonds. From a maturity perspective, nearly 30% comes due within one to two years, with the balance pretty even spread between the other yearly maturity buckets. This works out to an average maturity of 2.9 years, and an average duration of just 2.8 years. Geographically, it invests only in Canadian issues. The average yield to maturity is a mere 1.1%. With a management fee of 0.10%, the resulting MER is 0.11%, once taxes and other expenses are taken into account.
Read MoreRecommended List of Mutual Funds – July 2016
PowerShares 1 – 5 Year Laddered Corporate Bond Fund (AIM 53203– Front End Units) – In June, this laddered short term corporate bond fund underwent its annual reconstitution. When this happens, the five shortest duration bonds are removed from the index and replaced with ten bonds that have a term to maturity of five years are added in their place. The reason that ten bonds are replacing the five that were removed is last year, the index provider announced that over the next five years, the number of bonds in the index would be increased from 25 to 50. After the reconstitution, the fund held 35 bonds. I really see this as a positive, as the increased number of bonds increases the diversification, and reduces the security specific risk in the fund.
Read MoreETF Focus List – June 2016
Download PDF Version of this Report . Additions PowerShares S&P/TSX Composite Low Volatility ETF (TSX: TLV) – Low volatility funds and ETFs continue to be popular choices with investors. It’s not too difficult to understand why they are appealing, with the prospect of market like returns over the long term combined with lower downside. The problem I see with many of the low volatility...
Read MoreRecommended List of Mutual Funds – April 2016
. Download the PDF Version of the report here . List Changes . Additions Manulife Dividend Income Fund (MMF 4529 – Front End Units, MMF 4429 – DSC Units) – Managed by the team of Alan Wicks, Conrad Dabiet, and Jonathan Popper, this fund looks to assemble a diversified portfolio of businesses that are creating value at a pace faster than the broader equity markets. To do this, they use a bottom...
Read MoreETF Focus List – March 2016
. Download a PDF Version of this Report Additions BMO Short Corporate Bond Index ETF (TSX: ZCS) – The bond market continues to be a challenging place for investors. Yields remain near historic lows, and the interest rate outlook is somewhat uncertain. In the U.S., it was a near certainty that the Federal Reserve would be moving rates higher several times over the year. It now appears that...
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