Mac Ivy Foreign Equity Fund is a buy

Mac Ivy Foreign Equity tries to balance growth with capital preservation. This top Canadian mutual fund is a buy if you’re seeking a very conservative global equity fund.

We’ve added Mackenzie Ivy Foreign Equity Fund (Fund codes: MFC081(FE), MFC611(DSC), MFC7017(LL), MFC3158(LL)) to the Money Reporter’s recommended list of best Canadian mutual funds.

We like Mac Ivy Foreign Equity because it’s a conservative, nonvolatile fund. Mac Ivy Foreign Equity’s investment objective, after all, is to pursue “long-term growth consistent with protection of capital”. This objective should appeal to the more risk-averse investor.

To achieve its objective, the fund invests in equity securities worldwide, emphasizing global stocks. Though the fund’s investments are not limited geographically, they generally don’t include those in emerging markets. On the other hand, the fund usually invests a greater percentage of its assets in U.S. stocks than those from any other geographical area. By steering clear of riskier emerging markets and focusing more on the conservative U.S. market, the fund should have an easier time achieving its objective of capital preservation.

Its geographic breakdown includes: the U.S., 37.9 per cent; the U.K., 6.2 per cent; Australia, 5.9 per cent; France, 5.7 per cent; Canada, 3.5 per cent; Switzerland, 2.9 per cent; Belgium, 2.0 per cent; South Korea, 1.9 per cent; Japan, 1.6 per cent; and cash, 32.4 per cent.

Mac Ivy Foreign Equity follows a blended growth and value investment style. The fund seeks companies that have the greatest prospects for long-term growth, but strong consideration is also placed on assessing an investment’s intrinsic worth relative to its stock price.

Mac Ivy in top quartile of best global equity funds

The fund’s conservative investment approach has worked out well over short and long time frames. Over 10 years, for example, its compound annual growth rate of 7.1 per cent ranks in the top quartile of the global equity funds category. Over the past three- and five-year periods, it has performed in the second quartile of the category. And in the past year, it has been a top-quartile performer.

The fund is in experienced hands with Paul Musson. Mr. Musson has worked in the investment industry since 1992 and he has been with Mackenzie Investments since 2000. He is currently the lead manager of the Mac Ivy Team, and he manages Mac Ivy Foreign Equity with three other managers.

Right now, the management team has taken a cautious stance to equities. Nearly a third of the fund’s assets are held in cash, as the team has had difficulty finding attractively-priced stocks. That may change if markets suffer a setback. If so, the fund will have plenty of ammunition to capitalize on lower prices.

The fund is a buy if you have a low to medium risk tolerance, and you want a global equity fund that seeks long-term growth and capital preservation.


Money Reporter, MPL Communications Inc.
133 Richmond St. W., Toronto, On, M5H 3M8, 1-800-804-8846

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