Beutel Goodman is one of the most respected money managers in Canada.
Beutel Goodman North American Focused Equity Fund, managers use a disciplined, bottom-up, value-focused investment process, looking to build a concentrated portfolio of North American stocks
that are trading at levels well below what they believe it to be worth. The
true value of a company is determined by using the present value of its
sustainable free cash flow. To be included in the portfolio, a stock must
offer a return of at least 50% over a three-year period.
The fund has a Canadian bias, and the maximum invested in foreign
securities is 49% of the fund’s net assets. The portfolio will often look
much different than the index. At the end of December, it was overweight
financial services, consumer discretionary, and industrials. Valuation
levels are much better than the index or peer group, providing a higher
margin of safety.
The fund’s focus is on capital preservation, and the managers tend to take
a longer-term view when analyzing companies. They will typically take a
three- to five-year outlook, and this is reflected by the low levels of
portfolio turnover. For the past five years, turnover has averaged around
25%, which is consistent with a four-year hold on positions.
The managers remain disciplined in ignoring short-term noise, and focus
instead on the longer-term outlook. They have a unique sell discipline.
When a stock reaches their price target, they will automatically sell one
third of the position, and initiate a review of the holding. If they see an
improvement in the outlook, they will continue to hold the stock, or even
add to it. If they don’t see any improvement, they will sell out the
Performance has been excellent, with a 10-year average annual compounded
rate of return of 8.4% to Dec. 31, outpacing both the index and its peers.
Considering the managers’ low cost, disciplined investment process, I
expect this fund to continue to deliver superior risk-adjusted returns.
Beutel Goodman North American Focused Equity Fund
Beutel Goodman & Company
Canadian Focused Equity
Large Cap Value
Pat Polozzi since April 2004; Glenn Fortin since August 2008
BTG870 (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.