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CI Signature High Income Fund
Fund Card Despite gaining 1.2% in the quarter, the fund underperformed its peers. There were a couple of reasons for this underperformance. The fund has about half of its bond exposure invested in high yield issues, which were hit hard in the final quarter of the year. It also has an overweight position in REITs, which have struggled and had a tough Q4. Finally, financials, particularly U.S. financials faced some headwinds on economic worries. The result was a lackluster quarter where most of the gains were the result of the unhedged currency...
read moreTD U.S. Equity Index Fund
Fund Card The fund had a decent year, gaining 20.5% compared with the S&P 500, which was up by 20.8%. This underperformance is not surprising, given it is designed to track the Canadian dollar return of the S&P 500, net of fees. I should emphasize that nearly 19% of the gain was the result of the falling Canadian dollar, something that is not likely to be repeated in the coming year. If you are looking to protect against an increase in the value of the Canadian dollar, there is a currency neutral version available. It tracks the U.S....
read moreRBC O’Shaughnessy U.S. Value Fund
Fund Card With a modest 2.3% gain in the final quarter of the year, and an 8.9% loss for 2015, this quantitatively managed U.S. equity offering was the worst performing funds on the Recommended List. There were a couple of key factors contributing to the underperformance. The first is the fund’s currency exposure, which is fully hedged back to Canadian dollars. Because of this, it missed out on currency gains of more than 19%. Another reason for the underperformance was its value biased stock selection process. Value names have struggled...
read moreMackenzie U.S. Large Cap Class
Fund Card Using a mix of top down thematic investing and bottom up security selection, this fund managed by Erik Becker and Gus Zinn, posted a very strong 10.6% gain in the final quarter of the year. It was largely the technology and consumer names that propelled it higher, while the unhedged currency position bolstered gains further, as the Canadian dollar continued its slide against the U.S. dollar. The portfolio holds approximately 45 names, with the top ten making up about a third of the fund. It is overweight in healthcare, consumer, and...
read moreIA Clarington Canadian Conservative Equity Fund
Fund Card This is a fund that I continue to struggle with. There is no denying that recent performance has been abysmal, and there was a definite uptick in the volatility, and an erosion in the downside protection offered in the most recent selloff. But unlike the Franklin U.S. Rising Dividends Fund, which I removed from the Recommended List, I am more comfortable with the reasons for the decline and the investment process used. In very simple terms, it was largely the pipeline holdings that were responsible for the fund’s significant...
read moreCambridge Canadian Equity Class
Fund Card With a gain of 1.5% the fund managed to outperform the S&P/TSX Composite Index, but trailed its peer group. The managers have kept the sector positioning mostly unchanged over the quarter, adding slightly to consumer staples and financials, while reducing consumer discretionary names. At the end of the year, it looked much different than the broader Canadian equity market, with overweight positions in technology and consumer names, while underweight financials and energy. It also held nearly 20% in cash. Historically, the...
read moreFranklin U.S. Rising Dividends Fund
Fund Card When I first added this fund to the Recommended List I really liked its risk adjusted return profile. While it often lagged the broader market on an absolute basis, it’s lower than average volatility and excellent downside protection more than made up for it. This time however, it sold off more severely than the market and the overall volatility profile was also increasing. Looking deeper into the portfolio, valuations, according to Morningstar, look rather extended when compared to the broader market. This leads me to believe that...
read moreTD Science & Technology Fund
Fund Card One of the more interesting sectors to watch has always been the technology sector. There are constantly new ideas being developed and innovative products being brought to market. While this is all “cool”, there can be a higher degree of risk, making it an ideal candidate for a mutual fund or ETF. One of my favourite funds in the sector has been this T. Rowe Price managed offering. It invests in companies from around the world that are involved in the development, advancement and use of technology. At the end of December, it held...
read moreTrimark Canadian Small Companies Fund
Fund Card This high conviction, Canadian small and mid-cap fund had been a staple on my Recommended List of Funds until a year ago, when I removed it because it was closed to new investors. From a timing standpoint, this makes me look pretty good, given the fund struggled in 2015, posting a 24.5% loss, and was one of the weakest performing funds in the category. I spoke with Jason Whiting in early January about the fund. He attributed the poor performance in 2015 to a couple of things. The first was their decision to start adding to energy...
read moreBeutel Goodman American Equity Fund
Fund Card Historically, the U.S. has been one of the toughest markets to beat on a consistent basis. That said, this is one of the higher quality funds and tends to be in the running more often than not. It is managed using a highly disciplined, bottom up value approach that places emphasis on capital preservation, with a focus on delivering absolute returns and managing risks. To achieve this, the managers look for high quality, well managed, dividend paying companies that have a history of generating stable cash flows and have earned a...
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