Scary news on the mutual fund front: Gerry Coleman is 65.
Don't be too alarmed, The Globe and Mail's money manager of the decade isn't retiring just yet from the fund business. “I still love it,” Mr. Coleman says. “I like a challenge, I'm a very competitive guy and I like to win.”
That's the problem. Mr. Coleman's a winner in an industry that tolerates losers quite well. The average Canadian focused equity fund lagged well behind the benchmark S&P/TSX TSX-I composite over the 10 years to Nov. 30. CI Harbour, the fund run by Mr. Coleman since mid-1997, beat the index cold while exposing investors to less risk.
A simple, if somewhat controversial, strategy accounts for a lot of this success. When stock markets soar, as they have since March, Mr. Coleman sells some of his winning stocks and keeps the money in cash. When stock markets plunge, as they did last winter, that cash acts both as a cushion and a bankroll for buying cheap stocks.
Some people think equity fund managers are paid to buy stocks, and that holding cash is fence-sitting that generates no value for clients. Mr. Coleman's characteristically blunt response is that he simply doesn't buy stocks when they're out of bargain range.
“If that's what you want, our fund's not for you,” he says. “There are other managers out there. All kinds of them.”
|
Market Outlook 2010:
|
