It is managed much like other Trimark funds where managers view investing
not as if they are merely trading stocks but rather as taking an ownership
interest in those companies.
Jeff Feng and
Matt Peden focus on identifying well-managed, high quality companies using a process
that is fundamentally-driven and bottom-up. They look for companies that
they believe can generate and grow above-average levels of free cash flow,
that are growing organically, that can generate a high return on invested
capital through a full market cycle, and that have a sustainable
Valuation is important, but this is not a value fund in the traditional
sense, as the managers are willing to pay a higher price for an exceptional
business. Currently there is a consumer focus to the portfolio, with 45%
invested in the consumer-goods and consumer services sectors. Feng and
Peden like these areas because as the emerging markets evolve, there will
be a growing middle class that will increase its spending. Another 26% is
allocated to financial services, for much the same reason.
Top holdings at the end of March included Ping An Insurance Group Co. China
Ltd., Vipshop Holdings Ltd., Naspers Ltd., Liberty Latin America Ltd., and
Alibaba Group Holding Ltd.
Performance has been excellent, and the has outpaced both its benchmark and
peers on both an absolute and risk adjusted basis with first-quartile
performance over the longer term. The 3-year average annual compounded rate
of return to March 31 is 11.1%, while the 5-year return is 12.9%.
Volatility has been in line with the index and category average, with a
3-year average standard deviation of 13.2%, but given the quality focus of
the portfolio, this has the potential to decline over time.
My biggest concern is the cost of the fund, which posts an MER of 2.79% for
the Series A units, which is above the category average. If you are buying
the fee-based or the do-it-yourself units, the cost is lower, coming in a
1.68%, and 1.67% respectively.
Trimark Emerging Markets Class
Emerging Markets Equity
FundGrade A+ Award:
Large Cap Growth
Medium to High
Jeff Feng since April 2013; Matt Peden since April 2013
AIM2141 (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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