CIBC Wood Gundy Recommended Funds

Transcription

1 Investment Strategy Group Funds Research December 2015 Daniel Arsenault, CFA, FRM Director, Investment Funds

2 CIBC Wood Gundy Recommended Mutual Funds Summary Recommended Funds - Equities ISG Funds Research Avg Market MER 3 Yr Return 3 Yr Std Dev Fund Size Category Style Canadian Cap ($Bil) ($Mil) Beutel Goodman Canadian Equity Broad Large Value $ $5,260 CI Signature Select Canadian Broad Large Blend $ $2,150 EdgePoint Canadian Portfolio Broad Mid Growth $ $784 Fidelity Canadian Growth Company Broad Large Growth $ $1,451 IA Clarington Canadian Small Cap Broad Mid Blend $ $780 AGF Canadian Large Cap Dividend Dividend & Income Large Blend $ $1,548 Fidelity Dividend Dividend & Income Large Blend $ $1,697 Mackenzie All Cap Dividend Dividend & Income Mid Value $ N/A N/A $38 Mackenzie Canadian All Cap Dividend Dividend & Income Large Value $ $1,038 U.S. Beutel Goodman American Equity Broad Large Value $ $881 CI American Value Broad Large Blend $ $729 Sentry US Growth and Income Broad Large Blend $ $2,881 TD US Mid-Cap Growth Broad Mid Growth $ $809 Global Capital Group Global Equity Broad Large Growth $ $3,726 EdgePoint Global Portfolio Broad Mid Blend $ $4,186 Mackenzie Ivy Foreign Equity Broad Large Blend $ $4,352 Renaissance Global Growth Broad Large Growth $ $686 International Invesco International Growth Broad Large Blend $ $505 Emerging Markets Mackenzie Emerging Markets Broad Large Growth $ $931 RBC Emerging Markets Equity Broad Large Blend $ $2,151 Sector RBC Global Resources Broad Large Growth $ $138 Renaissance Global Infrastructure Broad Large Blend $ $1,766 Sentry Global REIT Broad Mid Blend $ $1,192 Note: MERs are as of the last reported period, for series A/B or equivalent. 3 year return and standard deviation numbers are annualized. Source: CIBC Wood Gundy, Fund Company Reports. 2 - Internal Use Only December 2015

3 Recommended Funds - Fixed Income ISG Funds Research Primary Average Average Duration MER 3 Yr Return 3 Yr Std Fund Size Sector Geographic Maturity Yield Credit (Yrs) Dev ($Mil) Core Exposure (Yrs) Quality PH&N Total Return Bond Multi-Sector Canada % A $7,371 Lysander-Canso Short Term & Floating Rate Short-Term Canada % A 1.4 N/A N/A $129 Complementary Renaissance Global Bond Sovereign Global % A $444 Templeton Global Bond Sovereign Global % BBB $2,232 Lysander-Canso Corporate Value Bond Fund IG Credit Canada % BBB $1,261 Renaissance Corporate Bond IG Credit Canada % BBB $3,783 RBC Global Corporate Bond IG Credit Global % BBB $5,186 Mackenzie Global Tactical Investment Grade Bond Multi-Sector Global % A N/A N/A N/A $52 PIMCO Monthly Income Multi-Sector Global % BBB $7,700 PIMCO Unconstrained Bond Multi-Sector Global % A 1.5 N/A N/A $319 Diversifier Manulife Strategic Income Multi-Sector Global % A $6,104 Trimark Global High Yield Bond High Yield Global % B $106 AGF Floating Rate Income Fund Floating Rate Global % B $316 Equity Hybrid Dynamic Preferred Yield Preferred Shares North America % P2M 1.8 N/A N/A $382 National Bank Preferred Equity Inc Preferred Shares Canada % P $355 Note: MERs are as of the last reported period, for series A/B or equivalent. 3 year return and standard deviation numbers are annualized. Source: CIBC Wood Gundy, Fund Company Reports. 3 - Internal Use Only December 2015

4 Recommended Funds - Asset Allocation Category Equity Style Fixed Income Sector Avg Market Cap ($Bil) ISG Funds Research Average Credit Quality MER 3 Yr Return 3 Yr Std Dev Fund Size ($Mil) Canadian Neutral Balanced Fidelity Canadian Balanced Balanced Large Growth Credit $21.9 A $7,248 Fidelity Monthly Income Tactical Large Blend Blend $16.2 BBB $11,965 Invesco Canadian Balanced Balanced Large Growth Blend $22.1 A $813 Global Neutral Balanced Capital Group Emerging Markets Total Opportunities Tactical Large Blend Credit $13.2 BBB $306 Fidelity Global Monthly Income Tactical Large Blend Blend $35.7 BBB $2,088 Global Fixed Income Balanced Franklin Quotential Diversified Income Conservative Large Blend Government $20.8 BBB $1,509 Note: MERs are as of the last reported period, for series A/B or equivalent. 3 year return and standard deviation numbers are annualized. Source: CIBC Wood Gundy, Fund Company Reports. 4 - Internal Use Only December 2015

5 Recommended Funds Alternatives Category Style Avg Market Cap ($Bil) ISG Funds Research MER 3 Yr Return 3 Yr Std Dev Fund Size ($Mil) Specialty Dynamic Alternative Yield Equity Oriented Large Growth $ $1,656 Dynamic Premium Yield Fund Equity Oriented Large Blend $ N/A N/A $1,433 Note: MERs are as of the last reported period, for series A/B or equivalent. 3 year return and standard deviation numbers are annualized. Source: CIBC Wood Gundy, Fund Company Reports. 5 - Internal Use Only December 2015

6 ISG Funds Research Our Screening Process Quantitative Screen We use a variety of databases to screen the quantitative aspects of the mutual funds available to Canadian investors. We use data from Morningstar Research Inc. and information provided to us by the mutual fund companies. We must stress that a mutual fund s past performance is not necessarily indicative of future returns. 1) Return numbers: All mutual funds are screened on both an absolute and relative return basis over several intervals. As mutual funds are medium to long-term investments, we tend to place heavier emphasis on a fund s three and five-year returns than we do on its recent performance. We analyze the returns using a wide array of analytics. Some examples include the performance relative to a fund s peer group, performance against its respective index over time, calendar year returns, magnitude of returns and losses, performance trends, alpha generation capabilities, performance during bull and bear markets, up-side and down-side capture, etc. 2) Risk numbers: We use several key measures of risk when analyzing mutual funds, including traditional measures such as standard deviation and range of returns, as well as beta, downside deviation, downside frequency and magnitude. These measures are assessed over different periods on both an absolute and a relative basis. We also analyze the trends to determine if there has been any significant deviation from the fund s stated investment objectives. 3) Risk/Return numbers: While high returns and low risk are desirable, we screen for funds that can deliver strong performance at low levels of risk. We measure the returns a manager generates relative to the amount of risk they incur using various measures such as the Sharpe Ratio, Treynor Ratio, Sortino Ratio and risk/return scatter diagrams. These measures are tracked over different intervals to analyze the trends. 4) Attribution analysis: An attribution analysis is very informative for a number of reasons. These reports give us a sense of whether a fund is actively managed or a close replication of its benchmark index. The reports show how much of a fund s return can be attributed to the manager s asset allocation and stock selection ability, and how much is derived from currency fluctuations. It is also valuable to track the attribution reports over different intervals to see how a manager has fared over time. Qualitative Screen We meet with portfolio managers and fund company representatives and attend due diligence conferences and mutual fund analyst meetings to get a better sense of a fund beyond the numbers. A manager s outlook on both the economy and market is factored into our analysis as well as how well the management team is aligning the fund s holdings with its forecast. Investment philosophy and experience are also factors in our analysis. What we try to take away from these meetings include: 1) Investment Process: We consider the models that the manager/investment team use to manage their portfolios, buy/sell disciplines, asset valuation models, investment philosophies employed and the degree of idea sharing among managers within the company. We look for investment disciplines that have a history of success using processes that are repeatable. 2) Talent Management: We prefer portfolio managers who have greater than 10 years experience in the industry. We also like to see that the portfolio managers are well-supported by their companies in terms of having the necessary culture and resources to allow them to do the best job possible. We also prefer to see the interests of the manager and investors aligned through medium to long-term performance-based compensation agreements and investment in the funds they manage. 3) Economic/Market Forecast: We consider the managers short to long-term outlook for the markets and what strategies they employ to align the holdings of the portfolio with their forecasts. 4) Style drift: We assess the degree to which management deviates from the stated investment style and whether or not the managers are chasing trends that are unsuitable for the fund s risk profile. 5) Diversification: We look at whether, relative to the fund s stated profile, the portfolio is sufficiently diversified across sectors and countries and not highly concentrated in a small number of holdings. 6) Risk management process: We want to see that there are processes in place to mitigate risk. Some examples include limits on exposures to countries, sectors/industries and individual companies. In addition, a comprehensive investment oversight process should be in place. There should also be risk management from an operational perspective, such as data recovery processes. 6 December 2015

7 ISG Funds Research Glossary of Terms Modern Portfolio Statistics Standard Deviation: A statistical measure of risk reflecting the extent to which rates of return for an asset or portfolio may vary from period to period. Standard deviation measures the dispersion of periodic returns around the average return. The larger the standard deviation, the greater the range of possible returns and therefore, the more volatile the portfolio. Other Statistics Fund Size: The net assets of the fund as of the quarter end reporting date. Management Expense Ratio (MER): The percentage of total fund assets that is used to cover expenses associated with the operation of a mutual fund. This amount is taken out of the fund's assets and lowers the return that fund holders achieve. These expenses include management fees and operating expenses. The management fee is the fee that is charged to the fund by the portfolio manager and it is often a fixed percentage of the fund s assets. The operating expenses are the expenses that the fund incurs through operation and this can include brokerage fees, taxes, investor services and interest expenses. The MERs quoted in this document are as of the most recent period reported in the fund s regulatory filings and are not forward looking. Quartile Ranking: A division of observations into four defined intervals based upon the values of the data and how they compare to the entire set of observations, with 25 of the observations in each quartile (e.g. a first quartile performer will rank among the top 25 of funds under the same investment mandate). 7 December 2015

8 ISG Funds Research Disclosures & Disclaimers Mutual Fund Disclaimer Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. The indicated rates of return are the historical annual compounded total returns, including changes in unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any security holder that would have reduced returns. Mutual funds are not guaranteed. Their values change frequently, and past performance may not be repeated. Proprietary Product Disclaimer CIBC Mutual Funds CIBC Asset Management Inc. (CAMI) acts as portfolio advisor, CIBC Trust Corporation acts as trustee, and CIBC acts as manager of the CIBC Mutual Funds. CAMI and CIBC Trust Corporation are wholly-owned subsidiaries of CIBC and, therefore, affiliates of CIBC Wood Gundy. The CIBC Mutual Funds are connected issuers of CIBC World Markets Inc. CIBC Family Of Managed Portfolios CIBC Asset Management Inc. (CAMI) acts as portfolio advisor, CIBC Trust Corporation acts as trustee, and CIBC acts as manager of the CIBC Family of Managed Portfolios. CAMI and CIBC Trust Corporation are wholly-owned subsidiaries of CIBC and, therefore, affiliates of CIBC Wood Gundy. The CIBC Family of Managed Portfolios are connected issuers of CIBC World Markets Inc. Renaissance Investments Family Of Funds Renaissance is a trademark of CIBC Asset Management Inc. CIBC Asset Management Inc. (CAMI) is the portfolio advisor, manager and trustee of the Renaissance Investments family of funds. CAMI is a wholly-owned subsidiary of CIBC and, therefore, an affiliate of CIBC Wood Gundy. The Renaissance Investments family of funds are connected issuers of CIBC World Markets Inc. Frontiers Pools Frontiers is a registered trademark of CIBC Asset Management Inc. (CAMI). CAMI is the manager of the Frontiers Pools. CAMI is a wholly-owned subsidiary of CIBC and, therefore, an affiliate of CIBC Wood Gundy. The Frontiers Pools are connected issuers of CIBC World Markets Inc. Axiom Portfolios Axiom and Axiom Portfolios are registered trademarks of CIBC Asset Management Inc. (CAMI). CAMI is the portfolio advisor, manager and trustee of the Axiom Portfolios. CAMI is a wholly-owned subsidiary of CIBC and, therefore, an affiliate of CIBC Wood Gundy. The Axiom Portfolios are connected issuers of CIBC World Markets Inc. CIBC Pooled Funds CIBC Global Asset Management Inc. (CGAM), which operates under the brand name CIBC Asset Management, is the portfolio advisor and manager of the CIBC Pooled Funds. CGAM is a wholly-owned subsidiary of CIBC and, therefore, an affiliate of CIBC Wood Gundy. The CIBC Pooled Funds are connected issuers of CIBC World Markets Inc. CIBC Wood Gundy is a division of CIBC World Markets Inc., a subsidiary of CIBC and a Member of the Canadian Investor Protection Fund and Investment Industry Regulatory Organization of Canada. This report is provided for informational purposes only and does not constitute an offer or solicitation to buy or sell any securities discussed herein in any jurisdiction where such offer or solicitation would be prohibited. The securities mentioned in this report may not be suitable for all types of investors. This report does not take into account the investment objectives, financial situation or specific needs of any particular client of CIBC Wood Gundy. Recipients should consider this report as only a single factor in making an investment decision and should not rely solely on investment recommendations contained herein, if any, as a substitution for the exercise of independent judgment of the merits and risks of investments. Past performance is not a guarantee of future results, and no representation or warranty, express or implied, is made regarding future performance of any security mentioned in this report. Information, opinions and statistical data contained in this report were obtained or derived from sources believed to be reliable, but CIBC Wood Gundy does not represent that any such information, opinion or statistical data is accurate or complete, and they should not be relied upon as such. All estimates, opinions and recommendations expressed herein constitute judgments as of the date of this report and are subject to change without notice CIBC World Markets Inc. All rights reserved. Unauthorized use, distribution, duplication or disclosure without the prior written permission of CIBC World Markets Inc. is prohibited by law and may result in prosecution. The CIBC trademark is used under license. 8 December 2015