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FundGrade™ A grade EdgePoint Canadian Portfolio leads the performance parade
1/19/2019 3:45:24 PM
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By Dave Paterson  | Wednesday, January 03, 2018


Toronto-based money manager EdgePoint Wealth Management offers five funds. The EdgePoint Canadian Portfolio is their Canadian equity offering that boasts first-quartile performance that exceeds both its benchmark and peer group. The fund has a monthly FundGrade A rating, and garnered the annual FundGrade A+® Award for both 2015 and 2016.

Managed by Edgepoint’s team of Geoff MacDonald, Ted Chisholm, Andrew Pastor, Tye Bousada, and Frank Mullen, the EdgePoint Canadian Portfolio invests in companies of any size, primarily in Canada, that have strong competitive positions, excellent long-term growth prospects, and strong management teams. Valuation is a key component of the Edgepoint process, as the fund’s managers look to buy companies at prices that are below what they believe them to be worth. While the focus is on Canadian names, the fund can invest abroad, but usually won’t put more than 15% in foreign names.

The portfolio is built on a bottom-up basis, with sector weights being the byproduct of the stock selection process. The result is a portfolio that looks nothing like the index. To help ensure proper diversification, the managers look to diversify across business ideas.

It is a concentrated, yet diversified, portfolio, typically holding around 65 names, with the top 10 holdings representing just under 45% of the fund. The fund’s time horizon is longer term, typically five or more years, and the managers exercise patience, allowing their investment thesis to play out.

Top holdings as of Sept. 30 (the most recent data available at the time of writing) included PrairieSky Royalty Ltd. (TSX: PSK), CES Energy Solutions Corp. (TSX: CEU), Granite Real Estate Investment Trust (TSX: GRT.UN), Constellation Software Inc. (TSX: CSU), and Restaurant Brands International Inc. (TSX: QSR).

Portfolio turnover has been very modest, averaging less than 30% for the past five years. The managers will sell a company for a couple reasons: First is that the investment thesis is no longer valid; and second, they are able to find a better idea for the portfolio. The management team is constantly looking to upgrade and will sell a name to make room when a better idea becomes available.

Performance of this fund has been excellent, on both an absolute and risk-adjusted basis. For the past five years, it’s delivered an average annual compounded return of 13.2%, outpacing the index and peer group. Volatility has been above average, which is not surprising given the all-cap nature of the portfolio.

Costs are quite competitive, with an MER of 2.15% for the front-end units, which is well below the category average.

This is a great core Canadian equity offering for those who can stomach the potential for higher volatility.

EdgePoint Canadian Portfolio
Fund company:
EdgePoint Wealth Management
Fund type:
Canadian Equity
FundGrade Rating: A (November)
FundGrade A+ Awards: 2015, 2016
Style: Blend
Prospectus risk level: Medium
Load status: Optional
RRSP/RRIF suitability: Excellent
Managers: Geoff MacDonald, Ted Chisholm, Andrew Pastor, Tye Bousada, and Frank Mullen
MER: 2.15%
Fund code: EDG108 (Front-end load)
Minimum investment: $15,000

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 of 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

© 2018 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.


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