A fund for long-term growth with medium risk

We’ve added Mackenzie Canadian Growth Fund to our Recommended Mutual Funds list.

Mackenzie Canadian Growth Fund (Fund codes: MFC650(FE), MFC640(BE), MFC7028(LL)) invests mainly in Canadian stocks to achieve long-term capital growth and provide a reasonable rate of return.

The fund’s investment approach follows a company-focused investment style, seeking companies with strong management, good growth prospects and a solid financial position. Emphasis is placed on paying reasonable prices for the free cash flow growth that companies in the portfolio are expected to achieve. This company-focused approach results in a portfolio that’s different from the fund’s benchmark index.

The fund is managed by a team of four managers. The most senior member of the team is Dina DeGeer, who has been a portfolio manager with the fund since 1995. Ms. Degeer is co-lead of the Mackenzie Bluewater Team, which seeks to invest in companies globally as if it were the owner of the businesses in which it invests, not as traders buying and selling pieces of paper.

Fund delivers stellar results

It’s an investment approach that appears to have paid off well. Since inception, the fund’s compound annual growth rate is 9.9 per cent. Its 15-year annualized growth rate is 8.3 per cent, which ranks in the top quartile of the Canadian focused equity category. And it’s been a top-quartile performer in each of the past 10-, five- and three-year periods too. Over the past year, it has continued to perform relatively well, ranking in the second quartile.

While the fund’s historical returns in relation to its category have been high, its volatility has been slightly below average.

Despite the ‘Canadian’ in its name, the fund gives you adequate foreign exposure. About 51 per cent of its assets are invested in Canada, 27 per cent in the US and 16 per cent in Europe. Nearly six per cent of the portfolio is in cash.

Long-term growth with medium risk

The fund’s industry breakdown is as follows: industrials, 24.9 per cent; healthcare stocks, 17.9 per cent; financial stocks, 15.4 per cent; technology stocks, 11.5 per cent; consumer staples, 7.5 per cent; materials, 5.3 per cent; communications, 5.1 per cent; consumer discretionary, 4.5 per cent; and energy, 2.4 per cent.

Top holdings include Aon PLC (the US: insurance brokers), 5.1 per cent; Royal Bank (Canada: banks), 5.0 per cent; Quebecor (Canada: cable & satellite), 5.0 per cent; SAP SE (Germany: software), 4.5 per cent; CP Railway (Canada: railroads), 4.4 per cent; and Wolters Kluwer (Netherlands; consulting), 4.1 per cent.

The fund’s management expense ratio is 2.46 per cent.

Mackenzie Canadian Growth Fund is a buy if you want a core Canadian equity fund that offers long-term growth and involves medium risk.

This is an edited version of an article that was originally published for subscribers in the November 29, 2019, issue of Money Reporter. You can profit from the award-winning advice subscribers receive regularly in Money Reporter.

Money Reporter, MPL Communications Inc.
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