The fund holds a concentrated, go-anywhere portfolio, that invests in
companies of any size. The management team, headed by
Bill Kanko, looks for market-leading companies that are gaining market share and have
sustainable competitive advantages, and that are trading at levels well
below what the managers believe it to be worth.
Their approach is based on what they characterize as their “independent
thought” process, by which the fund managers must be able to identify a
proprietary investment thesis that is different from the market’s view of
the company. Before any new idea is added to the portfolio, not only must
it offer a more attractive valuation profile, but the managers must also
understand why the stock is better than something already in the portfolio.
It is a bottom-up process, which means the geographic exposure and sector
mix will be the result of the security selection. As a consequence, the
portfolio looks much different than its benchmark or peer group.
Geographically, it has significantly less invested in the U.S., which makes
up just over a third of the portfolio, compared with more than 62% of the
index. Instead, it is overweight Europe, China, and India.
From a sector perspective, it is overweight consumer discretionary and
industrial names, and is underweight the more defensive sectors such as
consumer staples, healthcare and utilities.
At the end of January, top holdings included European utility
Schneider Electric SE (EPA: SU), U.S. tech company
Oracle Corp. (NYSE: ORCL), U.S. industrial services firm
Nielsen Holdings PLC (NYSE: NLSN), Japanese healthcare company
Santen Pharmaceutical Co. Ltd. (TYO: 4536), and U.S. technology firm
Booz Allen Hamilton Holding Corp. (NYSE: BAH).
A drawback to the concentrated portfolio is its volatility, which has been
higher than the index or peers. With the 3-year average standard deviation
of 10.9% at Jan. 31, the fund has a 3-year Fundata Volatility Ranking of
8/10. Historically, it has outpaced in rising markets and lagged in falling
Because of this volatility, I would be hesitant to use it as a core
holding. Instead, I see it as a nice complement to a more diversified
CI Black Creek Global Leaders Fund
Large Cap Blend
Prospectus risk level:
Bill Kanko since June 2006
CIG11106 (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.
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