Managed by Jim Hall and Vijay Viswanathan of
Calgary-based Mawer Investments, the investment process is a fundamental,
bottom-up, approach using a growth-at-a-reasonable price (GARP) approach
that looks for wealth-creating companies trading at a discount to what they
believe it to be worth. They take a very long-term, patient approach. Their
culture is research-focused, and all assumptions made in the investment
process are put through a rigorous stress test and scenario analysis before
any decision is made.
The managers are benchmark agnostic, with the sector mix being the result
of the stock selection process. The fund will often look much different
than the S&P/TSX Composite. At the end of September it was underweight
consumer staples and consumer discretionary, materials, and
The fund is well-diversified, holding just over 40 names, with the top 10
making up just under 40% of the fund. While it has a large-cap focus, about
a third of the fund is in small- and mid-cap names.
Top holdings recently included
Royal Bank of Canada (TSX: RY),
Toronto-Dominion Bank (TSX: TD),
Bank of Nova Scotia (TSX: BNS),
Brookfield Asset Management Inc. (TSX: BAM.A), and
Canadian National Railway Co. (TSX: CNR).
Performance has been excellent, with a 5-year average annual compounded
rate of return of 13.6% to Oct. 31, compared with 8.4% for the index.
Shorter-term the fund is no less of a powerhouse, returning 13.2% for the
12 months ending Oct. 31, compared with 11.5% for the S&P/TSX
Mawer Canadian Equity Fund has also been less volatile than both the index
and peer group, with a 3-year average standard deviation of 7.5% for a
Fundata Volatility Ranking of 5/10. It has done an excellent job in
protecting capital in down markets. The downside capture ratio for the past
three and five years was 40% and 33% respectively. This means that on
average, the fund experienced much less downside than the index.
There is a lot to like about this fund. It has an excellent management
team, using a disciplined, repeatable, and risk-focused investment process.
Combined, this is an excellent core holding that has the potential to
continue to deliver above-average returns.
Mawer Canadian Equity Fund
Mawer Investment Management
FundGrade A+ Awards:
Medium to High
Jim Hall since December 1999; Vijay Viswanathan since September 2011
MAW106 (no 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.
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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.