FundGrade A+® Award-winner Cambridge Asset Allocation Corporate Class excels at finding balance
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By Dave Paterson  | Wednesday, May 30, 2018


 



Looking back over the past five years, one of the stronger offerings in the Tactical Balanced category has been the three-time FundGrade A+ Award-winner Cambridge Asset Allocation Corporate Class. The fund falls firmly within Cambridge’s three-pillar approach to investing: active management; downside protection and a focus on absolute returns; and managers’ alignment with unitholder interest through extensive ownership of managed funds.

The fund is managed by Cambridge Global Asset Management, a division of CI Investments. Cambridge’s Brandon Snow manages the equity sleeve of the portfolio, while Bob Swanson oversees the macro positioning.

The fund’s neutral asset mix is 60% equity and 40% bonds. At the end of April, it held 6% in cash, with 52% in equities and 42% bonds.

Equities are managed using Cambridge’s disciplined investment process that looks for companies that offer strong long-term growth potential and that are trading at attractive valuation levels. The equity sleeve is structured into two segments: a core, which invests longer-term, quality-focused investments they are likely to hold for several months to several years; and a more opportunistic segment, which invests in shorter-term, more tactical plays. These could be more macro-driven, or company-specific choices.

Top equity holdings as of April 30 included Franco-Nevada Corp. (TSX: FNV), Athene Holding Ltd. (NYSE: ATH), Tourmaline Oil Corp. (TSX: TOU), Canadian Pacific Railway Ltd. (TSX: CP), Symantec Corp. (NASDAQ: SYMC).

Fixed-income exposure is predominantly obtained through holding units in other Cambridge managed bond funds.

Positioning is currently overweight to bonds, with bond holdings as of April 30 consisting of three other Cambridge mutual funds: Cambridge Bond Fund Class I; Cambridge Canadian Short-Term Bond Pool Class I; and Cambridge Premium Yield Pool Class I units.

Longer-term performance, particularly on a risk-adjusted basis, has been excellent. The 10-year average annual compounded rate of return to April 30 was 4.9%, placing the fund in the top quartile of performance. With a 3-year average standard deviation of 4.4%, volatility has been lower than both the index and peer group, and fund performance has held up better than average in down markets.

With equity valuation levels remaining at the higher end of historic ranges, and yields poised to rise, it is expected the portfolio will remain defensively positioned. Given the team and process in place, this remains an excellent balanced offering.

CI Cambridge Asset Allocation Corporate Class A
Fund company:
Cambridge Global Asset Management
Fund type:
Tactical Balanced
FundGrade Rating: C (April)
FundGrade A+ Awards: 2014, 2015, 2016
Style: Tactical
Risk level: Low to Medium
Load status: Optional
RRSP/RRIF suitability: Good
Managers: Brandon Snow since June 2011; Bob Swanson since June 2011
MER: 2.44%
Fund code: CIG2322 (Front-end load)
Minimum investment: $500

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

© 2018 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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