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Number Cruncher

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

(DARRYL DYCK For The Globe and Mail)
(DARRYL DYCK For The Globe and Mail)

Number Cruncher

Amid volatility, dividend stocks kept Matrix fund on an even keel Add to ...

What are we looking for?

Stars and dogs among global balanced equity funds over three years.

Because funds that can invest in stocks and bonds continue to be popular in a volatile stock market environment, let’s look at these go-anywhere offerings.

The screen

We ranked the eight best-and-worst performing funds in this group for three years ending Aug. 31. (The funds must have more than 60 per cent invested in stocks.) U.S. dollar, segregated and duplicate versions of the funds were excluded, as well as funds closed to new investors.

What did we find?

A global balanced fund stuffed with dividend-paying equities.

Matrix Tax Deferred Income led the pack with an annualized gain of 9.5 per cent, and managed to do so despite charging a higher-than-average fee. Cassels Investment Management Inc., which runs the equity side, has hired Brookfield Asset Management to oversee the bond portion.

“We buy companies that have a history of dividend increases and prospects for dividend increases going forward,” said Liis Palmer, a portfolio manager with Cassels Investment Management. “They are good businesses with a competitive advantage or brand strength.”

Over three years, some of the fund’s gainers included liquor giant Diageo PLC and international tobacco company Philip Morris International Inc. Smaller high-yielding securities like Alaris Royalty Corp., which provides financing to private companies, and Westshore Terminals Investment Corp. also helped performance. “Westshore is yielding almost a 5-per-cent dividend,” she said.

Canada is the biggest country weighting on the equity side. Domestic stocks include energy names like Bonavista Energy Corp., Arc Resources Ltd. and Keyera Corp. that have “good distributions,” Ms. Palmer added.

The macro-economic backdrop suggests a sluggish, but improving U.S. economy, slower growth in Asia and an uncertain resolution for the euro-zone debt crisis, she said. With that in mind, “we want to make sure that the investments are as bullet-proof as possible.”

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Three-year stars and dogs among global equity balanced funds to August 31, 2012

Fund MER Assets (in $ mil.) 3 years to Aug. 31/12
Matrix Tax Deferred Income A 3.40 14.3 9.51%
Mawer Tax Effective Balanced 1.00 135.4 7.39%
Mackenzie Sentinel Divers Inc-A 2.29 42.4 7.34%
BMO GDN Growth Solution-Mutual 2.60 5.4 7.03%
Trimark Global Balanced 2.63 428.9 6.95%
Compass Balanced Growth Portfolio 1.93 495.6 6.95%
BMO GDN Global Diversified-Mutual 2.50 44.3 6.73%
Fidelity Global Growth Portfolio-A 2.47 25.5 6.42%

Source: Lipper


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