|The Gold Medal Goes To?
Thursday, February 25, 2010
When I meet other advisors around town, many ask me which fund
companies I like and why. With the 2010 Games presently being
staged in Vancouver, I’ll stay with an Olympic theme and give
you my favorite mutual fund companies and explain why I like
them. This is my personal list, which changes over time due
to fund managers coming or going and performance numbers.
Bronze- Acuity Funds
About 10 years ago, I had a client request for socially/environmentally
responsible investments. My research found that very few companies
(then or now) have much to offer in this small, but growing
segment. I stumbled upon a small (at the time) Canadian fund
company that had a few funds to satisfy clients who wished to
buy environmentally responsible funds for their portfolios.
Acuity also has a line-up of pooled funds that are available
to investors with $150,000 to invest. The pooled funds have
a few important benefits; 1) lower management fees than standard
funds, 2) the ability to deduct fees in open accounts and 3)
good performance numbers.
Every fund company likes to say how they are different
than the rest, but few really have noticeable differences. Acuity
does. All of their portfolio managers are key owners
in the company, so no start managers get headhunted by the competition.
Many of their portfolio managers have science and engineering
backgrounds, whereas almost all other portfolio managers have
a pretty similar education background. They never have just
one manager on a fund. Each manager only buys on his area of
specialty within a fund. Acuity has had some excellent performance
numbers in the last 10 years which helped attract advisors and
Both of these fund companies are very well managed and consistently
post upper quartile performance numbers. They both have excellent
diverse product line-ups, good research and analytical information.
Fidelity’s Clearpath life cycle funds, which get more conservative
as unit holders approach their target dates, performed very
well in a terrible 2008 environment and have since come back
strongly in 2009. I just don’t see any negatives with these
two excellent fund companies.
Dynamic Funds have been outperforming their peers for so long;
it’s definitely not luck or a few star managers dragging the
average up. When I look at performance figures from the various
categories (Canadian Equity, Dividends, Global, International
Equity, Natural Resources, European Equity among others) they
have top funds in almost every category. Their portfolio managers
are great stock pickers, who for the most part had big losses
in 2008 (like most managers), but have had even bigger gains
in 2009 to offset the ‘08 losses. Many funds with Dynamic have
great 1 year numbers, so I like the idea of a monthly investment
program rather than investing $100,000 as a lump sum into a
fund that just posted a 50% plus year return.
The only negative I have with Dynamic is when I see a MER on
one of their funds at 4-5%, which occurs on certain funds that
outperform their peer group by margin. Our industry has been
under attack from many high profile writers who like EFT’s,
mostly due to lower fees. Excessive fees of over 3% just give
them more ammunition to use against the industry.
Generic Mutual Fund Disclaimer
Commissions, trailing commissions, management fees and expenses
all may be associated with mutual fund investments. Please read the
simplified prospectus before investing. Mutual funds are not
guaranteed and are not covered by the Canada Deposit Insurance
Corporation or by any other government deposit insurer. There can be
no assurances that the fund will be able to maintain its net asset
value per security at a constant amount or that the full amount of
your investment in the fund will be returned to you. Fund values
change frequently and past performance may not be repeated.
Personal Opinions & Recommendations Disclaimer
The foregoing is for general information purposes only and is the
opinion of the writer. This information is not intended to provide
specific personalized advice including, without limitation,
investment, financial, legal, accounting or tax advice. However,
please call the author to discuss your particular circumstances.