# Mawer Mutual Funds



## OurBigFatWallet (Jan 20, 2014)

Anyone have any thoughts on Mawer mutual funds? Specifically Mawer Canadian equity (MAW106). I have a friend who invested in them last week. Not a big fan of mutual funds but the returns on this one seem solid


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## GoldStone (Mar 6, 2011)

Try forum search. Mawer is a frequent subject.


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## Echo (Apr 1, 2011)

Mawer is known for having some of the few actively-managed mutual funds worth owning. The key is their costs are relatively low (1.21% MER for this one) and their holdings don't "hug" the index, which gives them a chance to beat it.


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## GoldStone (Mar 6, 2011)

Mawer avoids volatile stocks, like gold miners for example. They may trail the index when resource stocks have a big year. The key to Mawer is to own them over a full business cycle. They shine in the down years.


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## EndersGhost (Jan 20, 2014)

I've done a lot of research into them, and in the end I'm going to go with the mawer balanced for now. Past performance doesn't mean much about the future, but they seem to produce results compared to index portfolio's I've put together. I'm going to just keep an eye on them to make sure they don't have any major shake ups. They seem to be a stand up company, contain no load, and low MER. It's a true value investment mutual fund (not an index fund). As per Goldstone, I don't know what would have to happen for them to struggle heavily.


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## GoldStone (Mar 6, 2011)

EndersGhost said:


> I don't know what would have to happen for them to struggle heavily.


They don't have to struggle heavily to become irrelevant. Do you want to pay an active fee for an index-like performance?

As to how it can happen:
1. Assets under management grow too big. The bigger you are, the harder it is to outperform the index. As Buffett said, investment success creates its own anchor. 
2. Key people leave or retire.

In other words, the usual stuff that ails many active shops.

I'm not saying that this is inevitable. Just keep a watchful eye on them.


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## EndersGhost (Jan 20, 2014)

Yeah, there assets are growing as well. We'll see how it goes. Your #1 and #2 are what I'm already aware of. It's very hard to keep beating it as well. So we shall see.


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## MoreMiles (Apr 20, 2011)

GoldStone said:


> Mawer avoids volatile stocks, like gold miners for example. They may trail the index when resource stocks have a big year. The key to Mawer is to own them over a full business cycle. They shine in the down years.


So why is the largest holding in their balanced fund a small cap fund? Isn't it more volatile?


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## MoreMiles (Apr 20, 2011)

Also, if you are interested in Mawer, you should also have a look at 
PH&N
Beutel Goodman
Leith Wheeler
Steadyhand

They all have low fees and well run just like Mawer.


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## GoldStone (Mar 6, 2011)

MoreMiles said:


> So why is the largest holding in their balanced fund a small cap fund?


That's not true. Please take another look.

http://www.mawer.com/mutual-funds/fund-profiles/mawer-balanced-fund/


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## MoreMiles (Apr 20, 2011)

You are right. It's strange the tax effective version of the balanced fund has the Small Cap fund as the largest holding. 

http://www.mawer.com/mutual-funds/fund-profiles/mawer-tax-effective-balanced-fund/


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## GoldStone (Mar 6, 2011)

Regular balanced fund is a fund of funds. Tax effective version is not. It owns most positions directly (to enable tax management). Global Small Cap is the only exception - that's why it sits at the top. I'm not sure why they made that exception.

The asset mix is very similar in both versions.


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## Echo (Apr 1, 2011)

MoreMiles said:


> Also, if you are interested in Mawer, you should also have a look at
> PH&N
> Beutel Goodman
> Leith Wheeler
> ...


I wrote a comparison of these funds and how they've beaten the index for the last decade:

http://www.boomerandecho.com/score-one-active-management-check-index-beating-funds/


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## humble_pie (Jun 7, 2009)

Echo said:


> I wrote a comparison of these funds and how they've beaten the index for the last decade:
> 
> http://www.boomerandecho.com/score-one-active-management-check-index-beating-funds/



very handy comparison chart, thankx.

would it be too much to ask if you could incorporate the Jarislowsky Fraser canadian equity fund? or possibly its balanced fund, whichever goes with your group.

besides rooting for the home team, the JF funds have probably the lowest MER of any of the low-cost managed funds in your table. It's only .65%. Steadyhand runs north of 1%, i don't know about the others.


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## Echo (Apr 1, 2011)

@humble_pie - I left out the Jarislowsky Fraser fund, as well as the Steadyhand fund, because it didn't have a 10-year track record (JF established in 2010). They are worth keeping an eye on though, and hopefully they help to drive down the cost of the others.


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## humble_pie (Jun 7, 2009)

Echo said:


> @humble_pie - I left out the Jarislowsky Fraser fund, as well as the Steadyhand fund, because it didn't have a 10-year track record (JF established in 2010). They are worth keeping an eye on though, and hopefully they help to drive down the cost of the others.



i see, thankx

but i still think it's a good idea to keep up with the times, not necessarily reduce one's view to investibles with a 10-year history or longer ...

would you consider adding a 3-year comparison table at some point? would steadyhand make it into this one as well?

i for one think it's important to show people the full range of what's available today & the problem with a 10-year table is that it's backwards-looking only.

sometimes i wonder if folks overlook these low-cost managed funds, thinking that only an etf grouping will be PC? but the fact is that some etfs have MERs as high as the jarislowsky group.

speaking of jarislowsky equity mutual fund, it's an XIU-looking kind of portfolio (yawn) but their absolute stroke of genius was that a year or 2 ago they sold all barrick. They really did, they got 100% out of barrick. Stock was very high, gold was peaking at that time.

a portf manager who can pull off something like that is worth the MER many times over i think.


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## Echo (Apr 1, 2011)

I understand what you're saying - I just left them out because they didn't fit the narrative of that particular post (i.e. funds with a 10-year track record of beating the index). I think a future post could look at the new breed of actively managed funds - lower costs, similar to ETFs, but with strong managers who make smart moves (like your Barrick example!).


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## christinad (Apr 30, 2013)

What happens if a lot of people sell their Mawer Bond fund shares? I'm wondering if a lot of people left the fund because the funds dropped (more then they have already) if the funds returns would drop. I have the Mawer balanced fund which contains 30% Mawer bond fund which is why I am interested. All ready the bond fund is losing money and I don't understand why people stay in the fund.


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## EndersGhost (Jan 20, 2014)

christinad, the point of the balanced fund is to match just that. A balanced portfolio. This means it will contain fixed income. I'm not sure what you mean by dropping, but YTD it's up 1.66%. At any rate, the point is to have a diversity so that when something isn't doing well, something else is. The long term returns on this fund are more around where you can expect to land. It's no different than the couch potato in that regards. When 2008 hit, a lot of people were happy they had bonds. Arguable that the climate is different right now, but if you'd rather have your FI as GIC's or something then the balanced fund isn't an appropriate choice.


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## christinad (Apr 30, 2013)

EndersGhost,

I thought I read somewhere that if a lot of people leave a fund, the return drops. I could be wrong though. I'm thinking if the bond fund isn't performing well and a lot of people decide to leave the fund the return drops. I realize the balanced fund is doing well but I don't think the bond fund is.


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## EndersGhost (Jan 20, 2014)

The mawer fund has a low turnover, and it in turn buys the bond fund. I don't think there's an issue here at all.


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## My Own Advisor (Sep 24, 2012)

When it comes to ETFs and funds, major money inflows usually cause distributions (yield) to drop. The opposite is true when major money goes out of the fund in question.

Mawer has a great track record. Their balanced fund is great for an all-in-one product if you want about 35% fixed income and cash all the time, equities everywhere else. 

Almost, almost, a buy and hold fund you can invest and forget for years for about 1% in fees folks might normally pay an advisor for.


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## GoldStone (Mar 6, 2011)

christinad said:


> What happens if a lot of people sell their Mawer Bond fund shares? I'm wondering if a lot of people left the fund because the funds dropped (more then they have already) if the funds returns would drop. I have the Mawer balanced fund which contains 30% Mawer bond fund which is why I am interested. All ready the bond fund is losing money and I don't understand why people stay in the fund.


1. The bond fund isn't losing money. It owns a basket of bonds. The market value of bonds can go up or down. The bonds will eventually mature. They will pay back their face value on maturity without losing any money. The value of the fund will eventually recover. It's only a loss if you need to sell now, or choose to sell now. 

2. Most investors own Mawer Bond through Mawer Balanced. I doubt they pay any attention to bond fund returns.

3. Mawer investors tend to be well informed. Most invest for the long haul. I'd be surprised if they suddenly start selling after one negative year. Mawer Bond returned -2.2% in 2013. Stocks can drop 2.2% and much more in a single day.

4. Mawer Bond keeps cash on hand to meet redemptions. It can handle normal volume of redemptions without selling any bonds.


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## GoldStone (Mar 6, 2011)

christinad,

If you are still concerned about the bond fund, you can switch to Tax Effective Balanced. It is very similar to regular Balanced that you currently own.

Tax Effective Balanced doesn't own other Mawer funds. It invests directly in stocks and bonds. This should address your concern.

I suspect that TDDI will charge you $45 if you switch. They handle it like a buy and sell.


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## OurBigFatWallet (Jan 20, 2014)

Sounds like some pretty decent feedback for Mawer. A MER of 1.2% for the Canadian equity fund isn't too unreasonable compared to others. 

Now cue the ETF vs mutual fund never ending debate


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## EndersGhost (Jan 20, 2014)

OurBigFatWallet - A debate I've been fighting in my own head for a month!


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## GoldStone (Mar 6, 2011)

OurBigFatWallet said:


> Now cue the ETF vs mutual fund never ending debate


Mawer Canadian Equity is a value fund. It would be interesting to have a race: MAW106 vs. Value ETF. Alas, we don't have a Canadian value ETF with a long track record.

FXM looks interesting but it's too new. It beat MAW106 in the 2 years of its existence. Keep an eye on it.

FXM MER is not cheap, btw.


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## Sasquatch (Jan 28, 2012)

My wife and I have all of our RRSPs ( close to 200k) invested in the MAW104 fund. I'm doing all the investing for us and I am happy with the funds performance. More importantly I can't be bothered with re-balancing and daily checkups on line as well as having to keep track of a dozen funds or so. I like the balanced approach because basically I'm lazy. So far I have no complaints about the performance and I'm going to leave everything where it is. Actually last year we started to slowly liquidate our RRSPs for age reasons and this year we opened non registered accounts to capture the proceeds of our cash ins. I've stayed with MAWER and we're buying units of MAW105 for tax reasons.
All in all we've been happy with MAWER. they've been having decent returns with low MERs and I'm not too worried about market fluctuations since fortunately we don't have to depend on our RRSPs or non reg.plans for our day to day expenses.


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## OurBigFatWallet (Jan 20, 2014)

Sasquatch said:


> My wife and I have all of our RRSPs ( close to 200k) invested in the MAW104 fund. I'm doing all the investing for us and I am happy with the funds performance. More importantly I can't be bothered with re-balancing and daily checkups on line as well as having to keep track of a dozen funds or so. I like the balanced approach because basically I'm lazy. So far I have no complaints about the performance and I'm going to leave everything where it is. Actually last year we started to slowly liquidate our RRSPs for age reasons and this year we opened non registered accounts to capture the proceeds of our cash ins. I've stayed with MAWER and we're buying units of MAW105 for tax reasons.
> All in all we've been happy with MAWER. they've been having decent returns with low MERs and I'm not too worried about market fluctuations since fortunately we don't have to depend on our RRSPs or non reg.plans for our day to day expenses.


@Sasquatch thanks for sharing. Any reason why you haven't invested in MAW106? (Canadian equity)? We invest in dividend growth stocks for the long term but lately I've been considering putting a portion of the funds into a Mawer fund. It would be nice to be lazy with a portion of it 

@Goldstone FXM will be interesting to watch. I'm looking for a longer solid track record so it's too new for me otherwise I'd take a closer look at it

@Endersghost what is your current approach? ETF or mutual funds?


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## GoldStone (Mar 6, 2011)

OurBigFatWallet said:


> Any reason why you haven't invested in MAW106? (Canadian equity)?


Take this tool for a spin.
http://www.ndir.com/cgi-bin/downside_adv.cgi

*Portfolio 1: *

40% All Canadian Bonds
20% TSX Composite
20% S&P 500
20% MSCI EAFE 

*Portfolio 2:*

100% TSX Composite


Run both portfolios from 1970 to 2013 (44 years)

Average Annual Gain (Geometric):

Portfolio 1: 10.02%
Portfolio 2: 9.41%

Standard Deviation:

Portfolio 1: 10.34%
Portfolio 2: 16.95%

Portfolio 1 performed better, with much less volatility. To put it differently, Portfolio 1 beat the crap out of Portfolio 2 on a risk-adjusted basis.

Harry Markowitz got a Nobel for discovering this.


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## EndersGhost (Jan 20, 2014)

@OurbigFatWallet the Mawer balanced contains 13% of the Canadian Equity (MAW106) already, so unless you want to hold even more, it's already got a healthy dose. Also, for my own funds, I'm just getting my money moved into iTrade, I've put about 45% into the Mawer Balanced now over ETFs. I won't lie, I've been going back and forth on these. Not to chase performance here, but Mawer has a history of beating the index, and they handle all the rebalancing etc. Now, if you look YTD, I think they are slightly behind the CP, but it's close. They weathered 2008 really well when you factor in since 2008. Regardless, now I'm at a cross roads, deciding if Mawer was the right choice, or if I want to do ETFs. I'm pretty sure I'll be buying more of mawer. My view on it is very similar to sasquatch's. Also, as I'm learning, I want to be able to focus on learning the other finer points of investing without worrying too much (even though the CP is passive anyways). So hopefully that doesn't muddy it. To be honest it feels like I want to not like Mawer if that makes sense lol. I plan on watching them closely. The nice part is if they do perform worse...it won't be by much IMO, and at that time it's easy enough to transition to ETFs. I was dead set on index ETFs when I first decided to make the switch, then I saw Mawer, did a lot of research and they impressed me. From all my research, it seems like they manage down turns really well. The fund actually floats a bit too and over time they change the allocation of the funds based on where they see the markets going. The fact that they are more of a value fund with a low MER is why I've gone with them. I think in the end, them vs indexing will be close. It also means I can buy 1 fund for free, instead of 4-6 @ $10 per trade, and there's no currency conversions either. That said, they could have a bad year and lose to the index too . So maybe it's "easier" in some ways, but I'll want to make sure they are performing still, so I'll still keep an eye out.

I also like MAW150 - Global Small cap. While it is inside the balanced fund, it does tempt me to want to buy some more of it .

Edit: Obviously it's coming from Mawer directly, but I thought it was an interesting read and didn't really "pick sides" too much. http://www.mawer.com/assets/Knowled...Great-Debate-A-Case-for-Active-Management.pdf


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## dubmac (Jan 9, 2011)

Sasquatch said:


> My wife and I have all of our RRSPs ( close to 200k) invested in the MAW104 fund. All in all we've been happy with MAWER. .


me too.
I have about 66K with Mawer. The MAW014 fund especially, is well balanced - 

Mawer Canadian Bond A 30.57% 
Mawer US Equity Class O 20.84% 
Mawer International Equity O 15.54% 
Mawer Canadian Equity A 13.08% 
Mawer Global Small Cap 9.09% 
Mawer New Canada A 6.06% 
Mawer Canadian Money Market Class O 0.20% 

I'll keep adding to this fund in our RRSP's


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## christinad (Apr 30, 2013)

I just wanted to point out the turnover for Mawer Bond is quite high. It is 37% and Morningstar says a turnover of 20% to 30% reflects a buy and hold strategy. In contrast, it says the turnover for Mawer Balanced is 0%. As long as the turnover doesn't matter I won't care about it.


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## EndersGhost (Jan 20, 2014)

Christinad,
I am newer to this as well, so someone can correct me if I'm wrong, but here's what morningstar says:
"Turnover Ratio
This is a measure of the fund's trading activity, which is computed by taking the lesser of purchases or sales (excluding all securities with maturities of less than one year) and dividing by average monthly net assets.
A turnover ratio of 100% or more does not necessarily suggest that all securities in the portfolio have been traded. In practical terms, the resulting percentage loosely represents the percentage of the portfolio's holdings that have changed over the past year.
A low turnover figure (20% to 30%) would indicate a buy-and-hold strategy. High turnover (more than 100%) would indicate an investment strategy involving considerable buying and selling of securities. Morningstar does not calculate turnover ratios. The figure is culled directly from the financial highlights of the fund's annual report."

I read this as mawer has been buying/selling the securities (bonds) within the portfolio. It's possible they are moving to more short term bonds with the threat of interest rates rising? At any rate, I'm not sure it means the number of "people" buying/selling, but means what they are trading internally.

In any case, even if it is people, I don't think there's anything to worry about. A few weeks ago there was a record number of people moving from equities into bonds. That influx alone can help explain this. The markets have been going up, if people get worried, they start switching over to FI...


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## christinad (Apr 30, 2013)

I just got Mutual Funds for Dummies from the library so i'm hoping I can become more knowledgeable. : - )


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## My Own Advisor (Sep 24, 2012)

"A few weeks ago there was a record number of people moving from equities into bonds. That influx alone can help explain this. The markets have been going up, if people get worried, they start switching over to FI..."

I'm doing the opposite, I've been getting out of bonds for years. My guess is bonds are likely to just beat inflation over the next couple of years but who knows.


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## EndersGhost (Jan 20, 2014)

MOA - I know how you feel. Feels like there's basically no good options for FI these days.


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## OurBigFatWallet (Jan 20, 2014)

@EndersGhost, thanks, interesting read from Mawer. I'm the same - I want to not like them as they are a mutual fund so I automatically associate with higher fees. But I hear good things and they do seem to handle downturns quite well. Perhaps a balanced strategy is best (for us). I like div investing and always will but it would be nice to be 'lazy' with a portion of it, especially if the fund appears to be well managed

$10 per trade? You need to switch to Questrade


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## EndersGhost (Jan 20, 2014)

@OurBigFatWallet - Yeah I went with iTrade because I bank with Scotia. I might look to switch in the future. Last night I've decided to stick with my mawer plan, and they are free so there's no real trade fees for me at this time. I like the idea of dividend investing and I think it's something I'll look at to add "income" in once I'm a bit older, and figure out how to pick up stocks at a good price.


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## My Own Advisor (Sep 24, 2012)

EndersGhost said:


> MOA - I know how you feel. Feels like there's basically no good options for FI these days.


Yeah, I mean, I have a few years into a DB pension, so I know I'm very lucky and hence don't feel the need for bonds as long as years keep adding onto my DB plan.

For many other folks I know this is not the case and because of that, I feel for the FI folks - those relying on fixed income are losing a battle with inflation.


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## Electric (Jul 19, 2013)

Yes, the government has declared war on savers. What is happening now is a transfer of wealth from savers to the kind of people who have debt to income of 163%.


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## GoldStone (Mar 6, 2011)

christinad said:


> I just wanted to point out the turnover for Mawer Bond is quite high. It is 37% and Morningstar says a turnover of 20% to 30% reflects a buy and hold strategy. In contrast, it says the turnover for Mawer Balanced is 0%. As long as the turnover doesn't matter I won't care about it.


Turnover is always high in the bond funds, including passive index bond funds.

* Bonds that have less than one year left to maturity are equivalent to cash. The fund has to sell them to buy longer bonds.
* Bonds throw off coupon payments on a regular basis. The fund has to reinvest them.
* Bonds can be called by the issuers. The proceeds have to be reinvested.
* Active bond manager can implement move advanced strategies such as "rolling down the yield curve". This is perfectly reasonable and adds value to the fund.

Morningstar statement about fund turnover is true and important, but it only applies to the equity funds. Bond funds are a different animal.

As I mentioned before, you have the option to switch to the tax effective version of the balanced fund. It doesn't own the bond fund. It invests in bonds directly. You won't see the frightening numbers such as bond fund annual return or bond fund turnover. What you don't know can't hurt you.


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## MoreMiles (Apr 20, 2011)

humble_pie said:


> very handy comparison chart, thankx.
> 
> would it be too much to ask if you could incorporate the Jarislowsky Fraser canadian equity fund? or possibly its balanced fund, whichever goes with your group.
> 
> besides rooting for the home team, the JF funds have probably the lowest MER of any of the low-cost managed funds in your table. It's only .65%. Steadyhand runs north of 1%, i don't know about the others.


Humble, can you tell me the fund codes for those funds you mentioned? I only found 'Select' version with a MER of 2-3%. thanks.


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## Uranium101 (Nov 18, 2011)

The only thing good about Mawer is that they are low cost producer.
However, the way they manage their portfolio is the same as other managers. Normally, I prefer managers who dares to put more than 5% of the fund into a single stock rather than just 1-3% here and 1-3% there. Insignificant amount of capital allocated to a particular stock means that they are not confident/good enough to pick stocks.
Also, I don't like mutual funds comparing itself with the TSX index. What is in the TSX? Gold miners, banks and natural resources. What is the total capitalization of TSX in comparison to the world exchanges? 2-3%.

I respect those funds that dare to measure themselves against the S&P500 and consistantly beat it over a period of a decade or more. Beating the TSX is nothing.

Edit: when you compare it to the S&P500, this is what you get: http://quicken.intuit.com/investing/mutual-funds/MAW104/Balanced-Fund
You would have done much better if you would just buy the S&P500 index fund.


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## GoldStone (Mar 6, 2011)

Uranium, fyi

You never ever compare a balanced fund to an equity only index. That's investing 101.

Balanced fund: stocks + bonds

You cannot compare (stocks + bonds) to stocks. Apples and oranges.

The idea of combining stocks and bonds is to reduce volatility, not to boost the returns.


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## MoreMiles (Apr 20, 2011)

GoldStone said:


> Uranium, fyi
> 
> You never ever compare a balanced fund to an equity only index. That's investing 101.
> 
> ...


Some people have not mastered Investing 101 yet wanted to do it themselves.
Mawer Balanced Funds lost only 16% or so in the bad 2009.. how much did S&P lose? 37%


It's like trying to tell people NASDAQ made a huge amount of gain last year so you might as well buy that only... except there is only one flaw, it also made a huge loss in the past like during the 2000.com bubble crisis. 

Balanced Fund = retirement preparation
Focused stock pick >5% = speculation, gambling

You can put all your money on NFLX AMZN GOOG NOK and double in one year, or lose 50%... there is nothing to brag about the gain from concentrated stock bet. It's a risky bet and good for you if you win, but that is not what these Balanced Funds are designed for.


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## GoldStone (Mar 6, 2011)

Uranium101 said:


> Edit: when you compare it to the S&P500, this is what you get: http://quicken.intuit.com/investing/mutual-funds/MAW104/Balanced-Fund
> You would have done much better if you would just buy the S&P500 index fund.


Much better? Really?

*10 year total return in Canadian dollars*











*15 year total return in Canadian dollars*










*20 year total return in Canadian dollars*










Uranium, this is really embarrassing for S&P 500, isn't it? To lose to a lowly balanced fund.


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## Uranium101 (Nov 18, 2011)

GoldStone said:


> Uranium, fyi
> 
> You never ever compare a balanced fund to an equity only index. That's investing 101.
> 
> ...


I knew I will get critics of such nature:
1) Not apples to apples comparison
2) Risk adjusted return is greater in a balanced fund (aka low Beta)

Let's assume we are competitors in running mutual funds. I went into all equities and stayed all equities. You, on the other hand constructed your portfolio with bonds, stocks, and [insert]. My portfolio beta (comparison to the S&P500) is close to 1, and yours is around 0.5 to 0.75. After ten years, I netted 10% each year, you've only gotten around 7%.

Now you have to ask yourself, do you prefer 10% or 7%? Or do you prefer to sleep better at night with 7% or sleep not as good with 10%?
This is the same idea that Warren Buffett was trying to teach. Just like he wanted to teach people that dropping stock prices is actually good for your wealth because you are a net buyer of stocks over time, not a net seller of stocks.

Let's hope more people will accept these 2 facts, learn and live with them.


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## GoldStone (Mar 6, 2011)

Uranium101 said:


> 2) Risk adjusted return is greater in a balanced fund (aka low Beta)


Not just risk adjusted return. Absolute returns were better two. See the charts above. 10, 15 and 20 years.


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## Uranium101 (Nov 18, 2011)

The data provided from my link included re-invested dividends, and it looks about right for the inception date.
On a neutral currency base, the S&P500 did beat that balanced fund. Your data is a bit bias.
I guess MAW104 did beat the S&P500 in the last 15 years, but lagged behind the S&P500 in their 26 years of operation (which is the inception date).

With recent multiple bubbles popping (namely technology and housing), a balanced fund is more favourable than an all equity fund.


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## GoldStone (Mar 6, 2011)

Uranium101 said:


> The data provided from my link included re-invested dividends


So does the data in the charts. That's what "total return" means.



> On a neutral currency base, the S&P500 did beat that balanced fund. Your data is a bit bias.


Your data says the same thing. See 10 year return in *your* data. Your data doesn't show 15 and 20 years.



> I guess MAW104 did beat the S&P500 in the last 15 years, but lagged behind the S&P500 in their 26 years of operation (which is the inception date).


Not just 15 years. 10 and 20 years too.



> With recent multiple bubbles popping (namely technology and housing), a balanced fund is more favourable than an all equity fund.


That's the whole point of a balanced fund. To have a smoother ride and to sleep better at night. Stock returns are not guaranteed, as you can see in the charts.


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## Uranium101 (Nov 18, 2011)

Using Peter Lynch's approach, I was able to yank out around 27% a year for the past 4 years.
His way of doing things is that you invest 100% in stocks (carefully picked of course), and transfer assets from company A to B if B's story becomes better than A's.
So, in my earlier years, I have invested in 20-25 stocks. I then scaled back to 12 stocks, later 7 stocks, then 5 stocks, followed by 2 stocks. Now I am in 1 stock. So my portfolio consist of 1 stock. I have my reasons for doing so:
1) Diversification is overrated
2) Mistake of trimming position because they had ran up too much
3) Recorded of only 1 stock pick out of 15 went bad (bad = not going bankrupted, just didn't make as much, ie: 1% annually versus 15% intended)

So I have decided to carefully analyze companies and pick the best one I could get my hands on. I also have a full time job; therefore, I couldn't follow many companies.
Although I get hit by huge volatility; however, I have grown out of it. I am not afraid of volatility anymore. Am I going insane? Well, kind of, in most people's minds.

I manage relatives' RRSP accounts for free. I will only do it for them under these conditions:
1) None of them gambles
2) Low expectations
3) Received mediocre results from investing with the professionals
I couldn't promise them anything, but I did told them that whenever a mistake is made, I will suffer more severely than they do because I am 100% invested whereas they have other properties such as GIC's, real estate and their small businesses. 

So far, I did get them around 15% annually. I have also shifted their portfolio into only 1 stock (the same one I own). I have consulted with them before head and they have agreed in writing that it's in their free will to do so. Let's hope this is not in violation of any security regulations LOL.

What I am trying to imply is that smoother ride doesn't equals to better returns.


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## GoldStone (Mar 6, 2011)

Uranium101 said:


> What I am trying to imply is that smoother ride doesn't equals to better returns.


The beauty is in the eyes of the beholder. To many people, a smoother ride *is* the better result.

Do you understand the concept of risk tolerance?

You are comfortable with 100% in one stock. Others are only comfortable with 100% in GICs. Many want something in between.

If I were you, I'd be embarrassed to continue this discussion. You started by claiming that S&P500 was a better investment than Mawer Balanced. I showed you how Mawer Balanced beat S&P500 on *an absolute basis* over 3 different periods.

On a risk adjusted basis, that was a murder. On a risk adjusted basis, S&P500 is lying in a pool of its own blood, beaten to a pulp.

The last time we had this discussion, I showed you how a simple balanced portfolio of 40% bonds, 20% TSX, 20% S&P500, 20% International beat S&P500 over a 40 year period. 40 year period is long enough, no?

Peter Lynch? He was an equity fund manager. It was his mandate to run an equity only portfolio. Go back and change his mandate to balanced. He would run a balanced portfolio for you. Change his mandate to 100% bonds? He would do that too. As long as you pay his management fee.

Warren Buffett? Berkshire keeps a huge pile of cash on hand. Buffett deploys it when equities crash. This is not that much different from a balanced fund.

Your 100% investment in IBM? It's a gamble. A well known value investor is shorting IBM.


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## MoreMiles (Apr 20, 2011)

I don't think you can convince many people here that one stock portfolio is good for retirement saving. You may be lucky to put all your eggs in one basket but not many people, perhaps except your relatives, would agree with you.


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## Uranium101 (Nov 18, 2011)

Nah, I don't expect convert anyone. But my results speak for itself.


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## OurBigFatWallet (Jan 20, 2014)

@Uranium just curious what is the one stock you hold?


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## Uranium101 (Nov 18, 2011)

IBM, my average price is slightly sub of $180.

Value investors do not short stocks. Over the years, it appears that the word "Value" have lost its meaning if anyone can claim to be a value investor even though they do non-value moves.


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## Sasquatch (Jan 28, 2012)

@Uranium.... you certainly have a different approach to investing. I wish you luck although I think you would have a hell of a lot more fun if you "invested" some of your funds in Vegas  
I sure hope that your relatives are aware and fully understand your investment philosophy as well as the relationship between risk and return.
All the best, hope you'll be a millionaire before you can say..... holy sh*t, what happened ;-)


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## humble_pie (Jun 7, 2009)

uranium you are saying your cost base is slightly sub $180?

but share price today is $184, how are you managing to pull out those annual 15% returns?


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## Uranium101 (Nov 18, 2011)

humble_pie said:


> uranium you are saying your cost base is slightly sub $180?
> 
> but share price today is $184, how are you managing to pull out those annual 15% returns?


Well, the share price is severely depressed. I am thinking of a rebound in the next 3-5 years. With IBM's high return on equity, I think I will manage to pull off 15% annually for the next 5-7 years. I will keep an lookout for better companies with better prices in the mean time. I initiated this single stock portfolio basically this year. Last year I had couple of stocks.


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## RBull (Jan 20, 2013)

^if that's so why bother selling IBM? Just sit on it and you're done.


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## GoldStone (Mar 6, 2011)

Uranium101 said:


> Value investors do not short stocks. Over the years, it appears that the word "Value" have lost its meaning if anyone can claim to be a value investor even though they do non-value moves.


I told you that a well known investor is shorting IBM, which happens to be your entire portfolio. You brushed my comment aside on a technicality (_"value investors don't short"_).

Are you not curious to learn the name of the well known investor?

Are you not curious to read his short thesis on IBM?

I thought you would be eager to research an opposing viewpoint.

After all, it's possible that he is right and you are wrong. Isn't it?


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## Uranium101 (Nov 18, 2011)

GoldStone said:


> I told you that a well known investor is shorting IBM, which happens to be your entire portfolio. You brushed my comment aside on a technicality (_"value investors don't short"_).


Well, I have heard a guy went broke shorting Nortel. So yeah, smart value investors or investors in general don't short stocks because they know the market can remain irrational longer than you can remain solvent.



GoldStone said:


> Are you not curious to learn the name of the well known investor?


Stan Druckenmiller? If someone else, please let me know.



GoldStone said:


> Are you not curious to read his short thesis on IBM?


Something about lack of innovation? If something else, please inform me. Greatly appreciated.



GoldStone said:


> I thought you would be eager to research an opposing viewpoint.


I think I have done some researches on the opposing viewpoints. Can you provide me with those points that makes you don't want to get long on IBM?



GoldStone said:


> After all, it's possible that he is right and you are wrong. Isn't it?


A good chance that he might be right. But the way I see IBM is different than he he sees it. I heard he went long on Amazon due to a recommendation by someone he trusts. I believe he talked about how bad IBM was, and how Amazon will kill it. He made those comments back in November 2013 and Amazon didn't go anywhere either.


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## Spidey (May 11, 2009)

For Canadian funds, I've settled on a strategy of ETFs and a few selective stocks. However, I hold both Mawer International Equity and Global Small Cap and have been very pleased with the returns.


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## OurBigFatWallet (Jan 20, 2014)

@Spidey what ETFs/equities do you invest in?


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## Spidey (May 11, 2009)

OurBigFatWallet said:


> @Spidey what ETFs/equities do you invest in?


XIU for Canadian. Although that's somewhat due to the choices when I invested. Vanguard may be a better choice.

For US: VTI and VTV

For emerging markets: VEE and ZEM

Equities: TD bank, IPL, CWT.UN, REI.UN, CAR.UN, HSE, CPG and MRG.UN are my biggest holdings.


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## OurBigFatWallet (Jan 20, 2014)

Thanks for sharing. I own a few of those equities as well and plan on diversifying in the future (hence the Mawer discussion)


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## marina628 (Dec 14, 2010)

I never heard of them until this thread


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## malarcus (Jan 2, 2014)

Good day all,

I currently hold both MAWER 104 and 106 (104 in RRSP and 106 in LIRA). I am very happy with both. The idea of using ETFs in my RRSP would be great but since my work calls me to go where I have no to poor access to internet for long period of time, I prefer going with the MF.

As I will have a DB pension at retirement, I can live with the Higher MER of the MF versus ETF for the convenience of not having to rebalance and any other dealings with the portfolios if I am away. I am paying for the convenience but again, every situation is different.

Marc


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## Blush (Jan 9, 2014)

I am an RBC Direct Investing Client and don't have access to Mawer Funds. So I would need to buy from online broker, any suggestions?


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## christinad (Apr 30, 2013)

It looks like Scotia itrades is the best option. You can buy funds a minimum $100.00 at a time (after 5000 initial investment). At BMO Investorline, you have to buy $500.00 at a time, other than that no fee. With TD Waterhouse you have to buy $1000 at a time and there is a $45.00 redemption fee.


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## EndersGhost (Jan 20, 2014)

I'm with iTrade, and it's free to buy/sell just like christinad said.

Also, if you have over $50K to invest, you can actually go with Mawer directly if you live in certain provinces.


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## MoreMiles (Apr 20, 2011)

An illustration from today, TSX down, S&P down, indexes down... but Mawer balanced up 0.25%. There are many other days like that. So far they have been beating balanced index portfolio.


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## fraser (May 15, 2010)

we very much like Mawer as well as Leith Wheeler.


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## Synergy (Mar 18, 2013)

MoreMiles said:


> An illustration from today, TSX down, S&P down, indexes down... but Mawer balanced up 0.25%. There are many other days like that. So far they have been beating balanced index portfolio.


Why would you compare Mawer balanced to individual stock exchanges or indexes? It's a balanced fund that should be compared to other balanced products, no? One would expect the Mawer balanced fund to be less volatile than the indexes considering it holds a 30% bond allocation.


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## Blush (Jan 9, 2014)

What about virtual brokers? Read that they are the best and cheapest.


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## silencer (Oct 4, 2014)

Uranium101 said:


> Well, the share price is severely depressed. I am thinking of a rebound in the next 3-5 years. With IBM's high return on equity, I think I will manage to pull off 15% annually for the next 5-7 years. I will keep an lookout for better companies with better prices in the mean time. I initiated this single stock portfolio basically this year. Last year I had couple of stocks.


Just a data point, IBM today is at $164. Completely off topic, of course.


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