MacKenzie Cundill Recovery Fund

[Belguy]

I have held the MacKenzie Cundill Recovery Fund for many years now but am considering dumping it. Before I do, I am wondering if anyone out there has any thoughts on this fund or any compelling reason why I should consider continuing to hold it. It is one of the few managed funds that I still have from my original investing years as most of my investments are now ETF's. Does this rather unique international small cap fund have any place in a diversified portfolio not withstanding it's less than stellar long term performance? I believe that Morningstar have rated it as a 2 star fund which is not exactly a ringing endorsement.

Would you be caught dead holding this fund in your portfolio?

http://mackenziefinancial.com/en/pub...=00742&lang=en

[Plugging Along]

I have been dumping mine. Under the advise of my fa, it just wasn't performing, and I see no reason to think anything wll change

[mrPPincer]

MER 2.62%. They're getting paid very well year in and year out even on their bad years.
An MER that high is way more than I could justify in my portfolio but to me keeping the costs down comes first.

[andrewf]

Hgh fee, low performance. Why are you torn, Belguy?

[Belguy]

Hgh fee, low performance. Why are you torn, Belguy?

I wanted a global small cap investment in my portfolio and felt that professional management might help in this segment. However, of late, I have been moving towards mainly a short, cheap, more easily manageable portfolio of broad-based ETF's and so this investment no longer meets that criteria. However, I am also a long term buy-and-holder and so would stick with this fund if there was any compelling reason to do so. Also, I do think that the larger caps will outperform in the kind of economic environment that we currently find ourself in.

For example, one of the few Morningstar five star rated ETF's is the BMO Dow Jones Ind. Avg. Hdgd. CAD Index ETF which also happens to be the ETF which posted the best 3 year return of 12.8 per cent as of August 31.

http://www.etfs.bmo.com/bmo-etfs/glance?fundId=72051

[Cal]

I wouldn't fully make your decisions based on morningstar ratings.

Having said that, what do you think the upside is on continuing to hold the MCRF? Then why hold it?

[Belguy]

Often, small caps can provide superior longer term returns. However, in today's environment, I think that it is more prudent to tilt one's portfolio in favour of quality large caps as these may be better able to withstand some of the potential shocks to the economy going forward.

As a counter argument, the second best three year performance for equity ETF's has been turned in by the iShares Russell 2000 Index C$ Hedged with a three year return of 12.7% as of August 31 (one year return of 31% as of September 30!)

http://ca.ishares.com/product_info/f...erview/XSU.htm

[PharmD]

If you are interested in the global small-cap sector why don't you consider something like the Mawer Global Small Cap Fund? It has a lower MER and good results (3 year return of 15.9%). I really believe that small caps are an area where active management can really be of benefit. It is a Canadian fund, but I hold Steadyhand's Small-cap Equity fund and I could not be happier with its low volatility and high returns.

[Belguy]

http://www.steadyhand.com/funds/smallcap/performance/

http://www.mawer.com/mutual-funds/fu...mall-cap-fund/

Compared to:

http://ca.ishares.com/product_info/f...rmance/XCS.htm

http://ca.ishares.com/product_info/f...rmance/XSU.htm

And the Vanguard FTSE All-World ex-U.S. Small-Cap ETF (VSS):

https://personal.vanguard.com/us/fun...T#hist=tab%3A1

From this information, which do you feel would be the way to go with your small cap allocation and what is your small cap allocation?

Here's another one to consider:

https://www.spdrs.com/product/fund.seam?ticker=GMFS

[humble_pie]

je le trouve insupportable lorsqu' il se débrouille comme ça, said the Black Prince.

please don't interrupt me, can't you see i'm on a roll pontificating about my teensy little funds, mumbled the Dormouse.

tais-toi, là, said Alice.

shan't, said the Dormouse. Every few weeks a bunch of newbies arrive so i get another chance to parade my vast knowledge of indexed funds.

vas-y, sous le lit ! cried the Black Prince. Je te pousserai moi-même.

le grand problème, c'est que quatre cent coups n'arriverai jamais à supprimer ce menace, said Alice.