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Mawer Balanced Fund: Award-winning performance at a reasonable price
9/21/2018 5:52:47 PM
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By Dave Paterson  | Wednesday, October 11, 2017


Despite a modest underperformance in 2016, Mawer Balanced Fund is one of the best balanced funds around. It is managed much like a fund of funds, investing in other mutual funds managed by Mawer. The asset mix is managed by Greg Peterson, and any changes to this mix are done in a very measured and gradual manner. The strategy has paid off, landing the fund the annual FundGrade A+® Award every year since 2012, and giving it a consistent monthly FundGrade™ A Grade.

The portfolio is diversified quite nicely, with exposure to most key asset classes, including domestic and foreign large cap and small cap stocks, as well as domestic and foreign fixed income. At the end of June, a third was invested in bonds, 18% Canadian equity, 19% in U.S. equity, and 26% international equity.

Each of the underlying funds are managed using Mawer’s disciplined, research-driven, bottom-up process that looks to find well managed, wealth creating companies that are trading at less than they are worth. This approach is very team-focused, with portfolio managers and analysts constantly challenging ideas. Another interesting aspect is the stress testing of valuations the team conducts, helping to provide an extra layer of insight to the companies they own.

The equity portfolio holds what can best be described as quality companies, and the sector mix is somewhat similar to the benchmark, except for a modest overweight in financials and industrials, and an underweight in healthcare, utilities, and real estate. It is the quality bias that created a headwind to the performance during the year, as it was the commodity-focused sectors, materials, and energy that led the way higher.

Fixed income is a bit of a weakness with this fund, as its positioning looks very much like the indices, resulting in a high levels of interest sensitivity, which hurt in a rising yield environment.

Still, this remains one of the best choices for investors looking for a one ticket solution. It offers a very disciplined management process, and a rock-bottom MER of 0.96%. Even adding in 1% for dealer compensation, this fund is still cheap.

Mawer Balanced Fund
Fund company:
Mawer Investment Management
Fund type:
Global Neutral Balanced
FundGrade Rating: A (August)
FundGrade A+ Awards: 2011, 2012, 2013, 2014, 2015, 2016
Style: Strategic
Risk level: Medium
Load status: No Load
RRSP/RRIF suitability: Excellent
Manager: Greg Peterson since June 2006
MER: 0.94%
Fund code: MAW104 (no load)
Minimum investment: $5,000

Dave Paterson, CFA, is the Director of Research, Investment Funds for D.A. Paterson & Associates Inc., a consulting firm specializing in providing research and due diligence on a variety of investment products. He is also the publisher of Dave Paterson’s Top Funds Report, offering regular commentary and in-depth analysis of Canada’s top investment funds. He uses a unique analytical approach to identify funds with strong, risk-adjusted returns, and regularly publishes his insights and analyses in Fund Library.

Notes and Disclaimer

© 2017 by Fund Library. All rights reserved. Reproduction in whole or in part by any means without prior written permission is prohibited.

Commissions, trailing commissions, management fees and expenses all may be associated with 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. No guarantee of performance is made or implied. This article is for information purposes only and is not intended as personalized investment advice.


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