The stock selection process is purely bottom up; however, the twist is that
there is a macro overlay the managers use to help identify companies that
they believe are well positioned to benefit from the broader secular
trends. Some companies now in the portfolio are benefiting from such trends
as increasing productivity growth, innovation in information technology,
including cloud software, medical technology, and data.
Once they have identified a potential investment opportunity, the
management team will do a more detailed fundamental review that involves
balance sheet analysis and putting the financials through their proprietary
valuation model. This helps them understand the true value of the company.
This focus on valuation helps to avoid paying too much for the potential
Once they decide to move forward with a stock, the weight in the portfolio
is based on their conviction and the share valuation, with more
attractively valued names holding a larger weight in the fund. The
portfolio holds around 40 names, with the top 10 making up around 40%.
Top holdings recently included Internet software and services firm
CoStar Group Inc. (NASDAQ: CSGP), packaged pet food products maker
Blue Buffalo Pet Products Inc. (NASDAQ: BUFF), healthcare equipment maker
DexCom Inc. (NASDAQ: DXCM), research and consulting services company
Verisk Analytics Inc. (NASDAQ: VRSK), and luxury goods maker
Carter’s Inc. (NYSE: CRI).
The portfolio looks much different than its benchmark, with overweights in
industrials, financial services, and healthcare. The managers have also
been reducing the cyclical exposure of the fund, so that it currently has
no exposure to energy or materials.
Performance has been strong, with a 3-year average annual compounded rate
of return of 8.5% as of Jan. 31, which has outpaced its peers. Volatility
has been below average, with a 3-year average standard deviation of 11.1%,
resulting in strong risk-adjusted returns.
For those looking for growth-focused U.S. small- and mid-cap exposure, this
is a fund to consider.
Mackenzie U.S. Mid Cap Growth Class Series A
U.S. Small/Mid Cap Equity
Medium / High
Phil Taller since November 2002
MFC1564 (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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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.