If you want just one Canadian equity mutual fund, let it be Mawer Canadian Equity. The fund has one of the lowest management expense ratios in its category, giving you an edge over more expensively-run funds.
Mawer Canadian Equity Fund (Fund code: MAW106 (NL)) invests for above-average long-term risk-adjusted returns by investing mostly in the securities of Canadian large-cap stocks. Treasury bills or short-term investments, not exceeding three years to maturity, may also be used from time to time.
Mawer seeks companies that generate wealth, or earn a return on capital greater than their cost of capital over time.
The fund’s top holdings include Royal Bank (financials), 5.0 per cent; cash, 4.9 per cent; TD Bank (financials), 4.7 per cent; Scotiabank (financials), 4.0 per cent; Brookfield Asset Management (financials), 4.0 per cent; Canadian National Railway (industrials), 4.0 per cent; CCL Industries (materials), 4.0 per cent; Rogers Communications (telecommunications), 3.3 per cent; Bank of Montreal (financials), 3.3 per cent; and Constellation Software (technology), 3.2 per cent.
The fund’s industry breakdown is as follows: financial stocks, 36 per cent; industrials, 16.5 per cent; energy, 9.7 per cent; telecommunications, 7.8 per cent; consumer discretionary, 5.7 per cent; materials, 5.1 per cent; consumer staples, 4.9 per cent; cash, 4.9 per cent; technology, 3.8 per cent; real estate, 3.6 per cent; and utilities, 2.0 per cent.
Mawer Canadian Equity Fund was launched in June 1991. Since then, the fund’s compound annual growth rate is 9.5 per cent. Low fees have certainly helped the fund post those stellar results, but strong management has ensured that results have been consistently strong.
The fund’s management expense ratio is 1.19 per cent. The average MER in the Canadian equity category is 2.11 per cent.
In the current equity market, the fund’s managers continue to fortify the portfolio by diversifying across wealth-generating companies, with what they consider to be excellent management teams, trading at attractive valuations. This, they believe, builds resiliency into the portfolio in the face of many different outcomes.
What’s more, while a strong performer, the fund, in our view, is one of the least risky funds you can choose from among Canadian equity offerings.
Mawer Canadian Equity Fund is a buy if you want long-term growth and you can tolerate low to medium investment risk.
This is an edited version of an article that was originally published for subscribers in the October 6, 2017, 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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