Fund in Focus: Manulife Global Equity Class

11-11-2020
Fund in Focus: Manulife Global Equity Class

FundGrade A+® Award winner one of the best in its category

 

Managed by the team of Jim Hall, Paul Moroz, and Christian Deckart at Calgary-based Mawer Investments (one of my favourite investment managers), Manulife Global Equity Class is a quality, growth-focused offering that holds a diversified portfolio of wealth-creating companies anywhere in the world. Its highly disciplined, research-focused, bottom-up investment process is probably best described as “quality growth,” as the managers are “valuation aware,” making sure they are not overpaying for the growth potential of a company.

The diversified portfolio holds roughly 70 names, with the top 10 making up about a third of asset weight. The fund can invest in companies of any size, and at the end of September it had roughly 75% in large caps, with the balance in small- and mid-sized companies.

Top holdings included Visa Inc., Alphabet Inc., Intertek Group PLC, Novartis AG, and S&P Global Inc.

The country and sector mix are the by-product of the bottom-up investment process. The portfolio is roughly balanced between U.S. and international equities, whereas the MSCI ACWI Index has 55% in the U.S. and 41% international equities. The portfolio has no exposure to real estate, energy, or utilities, and is overweight financial services, technology, and industrial services. It is also overweight healthcare and consumer services.

Performance, particularly over the long-term, has been excellent, with consistent, solid top-quartile returns. Its 5-year average annual compounded rate of return to Oct. 31 is 8.3%, while its 10-year annualized return is 11.5%. As a result, the fund is a perennial FundGrade A+ Award winner, most recently in 2019.

Volatility has been roughly in line with the index and peer group, which combined with the above-average returns has resulted in very strong risk-adjusted numbers. The fund has done a good job protecting capital in falling markets, participating in less than 85% of the market declines.

Even with an MER of 2.46% for the full-freight advisor sold units, in my view this is one of the best global equity funds around and is a very solid pick for those who are unable to invest directly with Mawer.

Manulife Global Equity Class
Fund company: Manulife Investments
Fund type: Global Equity
FundGrade: B (October)
FundGrade A+ Awards: 2013-16, 2019
Style: Bottom-up growth
Risk level: Medium
Load status: Optional
RRSP/RRIF suitability: Good
Manager: Jim Hall since November 2009; Paul Moroz since November 2009
MER: 2.46%
Fund codes: MMF4506 (Front-end load); MMF4706 (Low load)
Minimum investment: $500

Dave Paterson, CFA, is a money manager and an expert on investment fund research and due diligence on a variety of investment products.

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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. Dave Paterson is employed as an advising representative (portfolio manager) by Empire Life Investments Inc. (ELII), a subsidiary of Empire Life Insurance Company. ELII is the investment fund manager and portfolio manager of the Empire Life Mutual Funds and the portfolio manager of the Empire Life Segregated Funds (collectively, the Empire Funds). As such, his employment and his compensation may be connected to the success of ELII and the Empire Funds. From time to time, the Empire Funds may buy, sell, hold, or otherwise have an interest in securities that may be discussed in this report.