If you could own only one fund…

By Kate McCaffery | January 6, 2006 | Last updated on January 6, 2006
3 min read

Figuring out what your fellow advisors are selling to their clients is a fun exercise, but getting the rare opportunity to eavesdrop while they delve into more hypothetical scenarios is even more enjoyable.

The idea was hatched in Advisor.ca’s Town Hall, when an advisor named Henk asked the question: “If you could own only one mutual fund, which one would you choose?”

We decided to join the game by calling advisors and analysts to get their top picks.

Edmonton advisor Ryan Beebe, partner at Caplan, Beebe & Associates says he would probably pick the AGF Dividend Income Fund, an equity fund managed by Marc-Andre Robitaille. “It’s got a great track record; I like the style that Robitaille uses. It has stellar returns and quite frankly, I’ve always liked dividends whether it’s in an individual stock or a fund.”

Malcolm Ross, president of president of Vancouver based Investaflex, echoes some sentiments expressed in the Town Hall with his choice of the Acuity High Income Fund. The balanced fund is managed by David G. Stonehouse, Ian Ihnatowycz and Hugh McCauley. “They’ve got a great proven track record and I really like their management style,” he says. “It’s a good balanced fund approach.”

Mutual fund analysts stepped out a little, recommending the Resolute Growth Fund, but also the Trimark Fund and the CI Canadian Investment Fund.

“If I could hold any fund, regardless of risk? I would probably own the Resolute Growth,” says Mark Chow, analyst at Morningstar Canada. “We’re big fans of the manager, Tom Stanley. Yes, his volatility’s high, but if you look at it over any 12-month period, he’s never lost more than 17% or 18% in one 12-month period.”

Although the fund is risky — Stanley takes large positions sometimes in very illiquid small cap stocks, makes sector bets and doesn’t hold very many positions, “we think he’s done and excellent job,” says Chow. “There are a lot of things that could go wrong but he’s shown over time that he has the skills to avoid that.”

Stanley’s fund is interesting — he began investing in energy before the energy boom began. Before that the fund was invested in biotech and health care. “He’s not a one trick pony. If 10 years down the line energy comes back to where it was before and then goes nowhere, I don’t think you’ll see him in there. He will have gone on to something else that makes more sense at that point,” says Chow.

“It’s just that the fund is much more risky than most. Even though nothing’s happened in the past, it doesn’t mean it couldn’t’ happen in the future. That being said, he’s done just an amazing job to date.”

On the more conservative side, Chow recommends the CI Canadian Investment Fund, managed by Sionna Investment Managers president, Kim Shannon.

“She’s been able to do what most managers can’t. She’s been fairly sector neutral except when a sector like tech back in 2000, bothers her enough that she doesn’t believe in it. She’s a value investor who’s been able to use her exceptional stock picking ability to add value.”

Dan Hallett, president of Dan Hallett & Associates in Windsor, Ontario, says he would go with a global stock fund. If he were limited to one fund and never sell it, his choice would be the foreign equity Trimark Fund.

“Any fund recommendation comes down to the quality of the managers behind it. There’s been some concern with the fund over the years — there was Bob Krembil, then there was Bill Kanko. Kanko left and then Kanko returned and then Kanko left again. So there’s been a bit of turnover, but even today, if you walk in and talk to any of the managers, particular the global fund managers, Bob Krembil’s presence, or his influence is ever present in terms of how money is managed today at that firm,” says Hallett. “I have quite a high regard for Tye [Bousada] who is the lead manager on that, but also for the organization as a whole.”

Of course, owning one single fund rather than a portfolio is not generally recommended. The poster who started the thread nicely sums up the scenario: “We’re sitting around having a bevvie and I was wondering, if you could have (only) one fund, what would be your favourite?”

Add your favourite fund pick by visiting Advisor.ca’s Town Hall.

Filed by Kate McCaffery, Advisor.ca, kate.mccaffery@advisor.rogers.com


Kate McCaffery