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Powerhouse EdgePoint Canadian Growth & Income Portfolio wins FundGrade A+® Award for fourth straight year
3/20/2018 7:53:15 AM
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By Dave Paterson  | Wednesday, February 14, 2018


With their straightforward approach, Toronto based EdgePoint has been a favorite of mine for a while. They keep things simple with only four funds: a Canadian equity, a global equity, a Canadian balanced, and global balanced fund. The EdgePoint Canadian Growth & Income Portfolio is their balanced offering. And it’s a winner, literally. The fund was awarded the FundGrade A+ Award for 2017, adding to its shelf of three previous A+ Awards in 2014, 2015, and 2016.

The investment approach is also very simple and to the point. The management team of Geoff MacDonald, Tye Bousada, Frank Mullen, Ted Chisholm, and Andrew Pastor don’t view investing as buying shares of a company; instead, they view it as buying an ownership interest in the company, and they look to acquire this ownership at a price below what they believe it to be worth.

For equities, they use a fundamental, bottom-up approach that looks for companies of any size that have strong competitive positions, excellent long-term growth prospects, and strong management teams. They take a long-term view, typically looking out three to five years, but will use periods of short-term volatility to improve the portfolio.

Top holdings as of Dec. 31 included PrairieSky Royalty Ltd. (TSX: PSK), CES Energy Solutions Corp. (TSX: CEU), Constellation Software Inc. (TSX: CSU), Granite Real Estate Investment Trust (TSX: GRT.UN), and ATS Automation Tooling Systems Inc. (TSX: ATA).

On the fixed-income side, they take a similar approach. They look for securities they believe can deliver an attractive total return, but that they can buy at a price well below what it is worth. They tend to focus on corporate bonds, and can invest in both investment grade and high yield issues.

The mix between stocks and bonds can vary widely depending on their relative attractiveness. The fixed-income exposure can range between 25% and 60%. At the end of December, they had 33% in bonds, 61% in equities, and around 6% in cash.

Performance has been excellent. For the five years ending Jan. 31, the fund delivered an average annual compounded rate of return of 9.8%, handily outpacing its benchmark and peer group. Given the all-cap approach of the equity sleeve, volatility has been higher than average. But even with this higher volatility, risk-adjusted returns have outpaced.

Looking ahead, I see this trend continuing, with above-average returns but with higher volatility.

EdgePoint Canadian Growth & Income Portfolio
Fund company:
EdgePoint Wealth Management
Fund type:
Canadian Equity Balanced
FundGrade Rating: A (January)
FundGrade A+ Awards: 2014-2107
Style: Mid-Cap Blend
Risk level: Medium
Load status: Optional
RRSP/RRIF suitability: Excellent
Managers: Geoff MacDonald, Tye Bousada, Frank Mullen, Ted Chisholm, and Andrew Pastor
MER: 1.70% (front-end units)
Fund code: EDG188 (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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