I am Canadian – a multi-manager approach to Canada

The ‘I am Joe’ advertisements by Molson Canadians have become part of Canadian culture. “I am Canadian.” He shouts Joe at the top of his lungs.

Many financial experts will argue the same thing. With Canadian markets outpacing out southern neighbors in 1999 and continuing in 2000, we are seeing many global investors flock to Canada for good companies at cheap prices. Yet, Canadians seem to be doing to the opposite. In fact, according to Merrill Lynch’s Chief Canadian Economist, while foreigners bought $10.7 billion of Canadian stocks, Canadians moved $13.5 billion out of Canada to foreign stocks

Canadians are buying up global investments and in particular, they are attracted to a new breed of ‘multi-manager’ funds. Multi-manager funds tout themselves as one-stop-shopping for quality managers and the best offering a “best of the best” philosophy. Diversify by management style, geography, asset and you have the ‘dream’ product.

For Canadian patriots like Joe, Mackenzie Financial has just released a fund that should catch your attention. Along with this new hybrid of multi-manager funds, they offer the same approach and same idea but focused on Canada – what a concept.

High profile managers

It is pretty tough for anyone to argue the reputation and profile of the different managers contributing to the Mackenzie Select Managers Canada Fund:

Jerry Javasky, Chuck Roth and John Smolinski (The Ivy Team) Dina Degler, Dennis Starritt and Phil Taller (The Universal Group – Bluewater) Peter Cundill and Alan Pasnik (The Cundil Approach) Bill Proctor (The Industrial Group of Funds) John Rohr (Some high-tech influence)

Also, Nitin Mehta of Henderson will be contributing to the foreign component of the fund.

A winning approach

  • Best Ideas, not sector-neutral – Many Canadian Equity funds use the index as a benchmark for diversification. The Mackenzie Select Managers Canada Fund has little to do with what the index holds. Simply put, every manager must put his/her best ideas into the pot.
  • No restrictions – Often mutual funds will restrict the amount that can go into a particular sector like technology or resource for example. This fund really has no restrictions in terms of sector weightings. Managers are given free rein to put their best ideas to work.
  • Diversification reduces risk – Rather than try to buy 5 different Canadian money managers for style diversification, the Mackenzie Select Managers Canada fund makes a lot of sense. The chances of having this fund go completely out of favor because of style are less likely.
  • No cash – This fund is not designed to hold cash. This will help in bull markets and could be a performance drag in bear markets.
  • High MER – This fund charges a premium Management Fee (0.25% per year). With a unique concept, only time will tell if the higher MER is worth the story.

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