The fund has been around for a long time. The Series F was launched in March 1983, and the Series A debuted in November 2000. The fund is managed using a bottom-up,
fundamentally-driven, growth-at-a-reasonable price (GARP) approach that
looks for well-managed companies offering sustainable profitability, strong
earnings and cash flow growth, a durable business model, and a management
team with a history of sound capital allocation decisions.
To find these companies, managers
Garey Aitken and
Tim Caulfield use a multi-step process. The first step is to identify potential
investment candidates, looking for businesses with high levels of return on
invested capital that are trading at a discount. They will then learn about
the business, industry, and management. Next, they conduct their own
analysis to determine a company’s intrinsic value, using very conservative
assumptions. Finally, if appropriate, it will be added to the portfolio.
Their approach is very patient, which is evidenced by their very low levels
of portfolio turnover, which has averaged less than 20% for the past five
years. The portfolio holds approximately 50 names, with the top 10 making
up just less than 50% of portfolio weight.
As of June 30, the fund’s top holdings included a 6.6% allocation to
Brookfield Asset Management Inc. (TSX: BAM.A), 5.9% in
Canadian National Railway Co. (TSX: CNR), 5.3% to
Restaurant Brands International Inc. (TSX: QSR), 5.1% in
Royal Bank of Canada (TSX: RY), and 4.8% to
Toronto-Dominion Bank (TSX: TD).
Sector mix is the byproduct of the available opportunities, and can often
look much different than index. At the end of June, the fund had
significant exposure to financials, energy and industrials. It was
underweight utilities, information technology, and real estate.
Performance has been solid, modestly outperforming the index, with
marginally less volatility. The fund posted a 5-year average annual
compounded rate of return of 10% to June 30, with the 3-year return posted
at 2.6%, and the 12-month return at 11.1%. This is impressive, given the
fund’s hefty 2.46% MER, which is around the category average.
I consider this a core Canadian equity fund holding, and is definitely
worth taking a look at.
Franklin Bissett Canadian Equity Fund
Franklin Templeton Investments
FundGrade™ Rating: B (June)
FundGrade A+® Award: 2012, 2013, 2014
Large Cap GARP
Prospectus risk level:
Low to Medium
Garey Aitken since Jan. 2002; Tim Caulfield since Jan. 2011
TML202 (front-end load)
Dave Paterson, CFA, is the Director of Research, Investment Funds for
D.A. Paterson & Associates Inc., a consulting firm specializing in providing research and due
diligence on a variety of investment products. He is also the publisher
Dave Paterson’s Top Funds Report,
offering regular commentary and in-depth analysis of Canada’s top
investment funds. He uses a unique analytical approach to identify
funds with strong, risk-adjusted returns, and regularly publishes his
insights and analyses in Fund Library.
Notes and Disclaimer
© 2017 by Fund Library. All rights reserved. Reproduction in whole or in
part by any means without prior written permission is prohibited.
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.