Fund in Focus: Mawer Balanced Fund

Fund in Focus: Mawer Balanced Fund

Multi-year FundGrade A+® Award winner


As it does for all of its offerings, top-rated Mawer Investment Management uses a very disciplined, repeatable, and apparently very simple investment process for its Mawer Balanced Fund. On the equity side, managers look for high-quality wealth-creating companies that have a sustainable competitive advantage, excellent aligned management teams, and shares trading below what mangers believe to be their true value. The approach has yielded consistent results with above-average performance year-in-year-out, as reflected in the fund’s multi-year FundGrade A+ Awards.

This managers’ investment process has resulted in steady, consistent above- average risk-adjusted performance across all asset classes. Each of Mawer’s equity offerings has delivered top-quartile performance over the longer-term. Not so for their two fixed-income offerings, one Canadian bond and one global. The fixed-income managers use a relative-value type process that looks for both government and corporate bonds that offer a very attractive risk-reward framework. Performance has been more mixed relative to the equity strategies.

The Mawer Balanced Fund is an excellent one-ticket solution that invests in a mix of the underlying Mawer funds. The asset mix is determined by manager Greg Peterson based on his view of the risk-reward outlook. At the end of September, the fund held 6% in cash, 32% in bonds, 17% Canadian equity, 20% U.S. equity, and the rest in international stocks.

At the end of September, top holdings included Mawer Canadian Bond Fund Series O with a 30.1% weighting, Mawer US Equity Fund Series O at 20.2%, Mawer International Equity Fund Series O at 17.6%, Mawer Canadian Equity Fund Series O at 13.6%, and Mawer Global Small Cap Fund Series O at 7.1%.

Performance across all time periods has been excellent. Looking back over the past 10 years, the fund has posted above-average returns each year, except 2016, when it posted third-quartile performance. As of Nov. 30, the fund posted a 5-year average annual compounded rate of return of 7.6%, handily outpacing the category average of 4.5%.

Volatility has been in line with the category, but the above-average returns have resulted in risk-adjusted performance that is well above average. The fund has also done an excellent job in protecting capital in down markets. For the five years ending Nov. 31, it participated in only 81% of the downside of the benchmark.

When it comes to balanced funds, this remains an excellent choice, mainly driven by the extremely high quality of the underlying investment funds, particularly on the equity side. Factor in a very low MER of 0.91%, and it becomes an excellent core holding for do-it-yourself investors and those using fee-based accounts.

Mawer Balanced Fund
Fund company: Mawer Investment Management
Fund type: Global Neutral Balanced
FundGrade: A (November)
FundGrade A+ Awards: 2014-2018
Style: Blend
Risk level: Low to Medium
Load status: No Load
RRSP/RRIF suitability: Excellent
Manager: Greg Peterson, Steven Visscher
MER: 0.91%
Fund code: MAW104 (No load)
Minimum investment: $5,000

Dave Paterson, CFA, is a money manager and an expert on investment fund research and due diligence on a variety of investment products.

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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.