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Globe Investor

Number Cruncher

Stock screens for investment ideas from professional investors. Exclusive to subscribers of Globe Unlimited.

(Iuliya Sunagatova)
(Iuliya Sunagatova)

Number Cruncher

Balanced funds: Instant diversification, but watch for deadwood Add to ...

What we’re looking at

Balanced funds are far and away the most popular type of mutual fund these days, with net sales for the year through April 30 of $12.7-billion. Today’s screen is designed to help investors find consistent balanced funds that have performed well over both the short and long term.

Our screen

The value of owning a balanced fund is instant diversification. In this screen, we’ve included Canadian balanced funds that hold stocks and bonds in roughly equal proportions (neutral balanced), and that emphasize stocks (equity balanced) and bonds (fixed-income balanced). The next step was to gather the funds that have produced first- or second-quartile returns for 12 months and 10 years to April 30. Quartiles divide funds in a category into four groups by performance – one is best and fourth is worst.

Funds are ranked here from highest average annual 10-year on down.

What we found

You can see today’s tough investing environment reflected in the fact that many funds in our screen have lost money in the past 12 months and yet still rank in the first or second quartile. The funds that really stand out here have managed to blend good returns both in the past year and the past decade.

Be careful in interpreting these results, though. Funds may have flourished in the past year because they hold a lot of bonds. When interest rates rise, a heavy bond weighting will drag down a balanced fund. These funds will also lag if we ever get a sustained rally in stocks. Suggestion: Use the fund profiles on Globeinvestor.com to do further research on any funds on this list that look good to you.

Be a choosy consumer of balanced funds. They’re hugely popular right now, but there’s plenty of deadwood in the category.


Top Cdn. Balanced Funds (1st or 2nd-Quartile Rtns. for 12 Mnths & 10 Yrs. to April 30

Fund Assets ($ thousands) MER Minimum initial investment ($) 1-year return 10-year return
Middlefield Income Plus-A 76.9 2 "1,000" 0.32% 9.95%
TD Monthly Income "5,999.40" 1.48 100 2.71% 8.51%
Manulife Monthly High Income Fund "5,341.70" 2.18 500 1.97% 7.47%
RBC Monthly Income "8,192.90" 1.18 500 2.62% 7.21%
CIBC Monthly Income "6,713.80" 1.48 500 -0.84% 6.84%
TD Dividend Income-I "4,844.20" 2.04 100 1.28% 6.57%
Fidelity Canadian Balanced-A "1,458.00" 2.27 500 -1.44% 6.34%
Educators Balanced n/a 1.75 n/a -1.65% 5.92%
Counsel Fixed Income-A 106.5 2.33 "1,000" 4.57% 5.87%
Middlefield Income and Growth Cl-A 7.3 2.53 "1,000" 0.03% 5.80%



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