# MAW104 Fund Performance With Low MER



## dogleg (Feb 5, 2010)

This looks like a good fund . Are there down sides I am overlooking?


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## Rhaegar (Feb 21, 2014)

Considering the MER is less than the tangerine funds, and the performance is pretty impressive, I'd say it is indeed quite good. The only potential downside is that being actively managed, you never know if they will be able to keep it up forever... but their track record is long and impressive. I would expect that even if the performance doesn't continue forever it will still do about as good as a regular balanced passive portfolio.


If you look at the performance of the actual mawer funds that MAW104 holds you can get an idea of where the good performance is coming from as well. The global small cap fund in particular does quite well, as do their canadian funds. Their US and international stock funds do OK, but for the most part not excessively better than the indexes. 

This makes sense as small caps are where good management will really shine, and the canadian market being so wonky with it's sectors can also benefit from some quality active management.

I switched my TFSA e-series couch potato over to MAW104 a while ago and I haven't regretted it. I would say it's been more stable, and slightly better returns than my RRSP that is still in a traditional 60/40 e-series fund portfolio. Can't ask for much more than that.


Recently I've split off a portion to go a little heavier on their global small cap fund, because my risk tolerance is higher and I wanted a bit more growth equity exposure. I figure that will probably give better results than me taking a chunk of my portfolio to try and pretend at stocks on my own.


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## Flash (Nov 25, 2014)

I just recently discovered Mawer, and I am too going to invest in this after pondering for a while.

Going to alocate 60% to Maw104 and 40% to XIC and XAW (1:2 ratio for these ETF's) in my TFSA.

Also going to get my feet wet in their small cap fund.

The MER is much higher than normal/index ETF's, but that does not matter if the performance beats the ETF's (since both performance results are after costs such as MER's)


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## dubmac (Jan 9, 2011)

Be careful flash ..do not chase yesterday's fund results. 

Mawer104 is a balanced fund - it holds something like 20% in mawer US equity and 16% in mawer international fund. Mawer 104 Balanced fund is "up" +10% Year-to-date, compared to -9% on the TSX.

Mawer US Equity is up +18% YTD and MAWER Us Int'l fund up +17%.

Most of the increase is due to the fact that 38% of the fund is invested in the US and Int'l markets, which earned +17% YTD vs -9% TSX YTD.

I'm not convinced that the US market will be up 18% on the cdn market this time next year, so I am not convinced that MAW104 can maintain a 10% increase given the fact that much of the growth has already factored into the fund. I would expect a more realistic 5-7% going fwd.

I hold MAW104 and MAW105 and have been very happy with it...but ..don't expect double-digit returns based on historical results.


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## Rhaegar (Feb 21, 2014)

dubmac said:


> Be careful flash ..do not chase yesterday's fund results.
> 
> Mawer104 is a balanced fund - it holds something like 20% in mawer US equity and 16% in mawer international fund. Mawer 104 Balanced fund is "up" +10% Year-to-date, compared to -9% on the TSX.
> 
> ...


Any couch potato portfolio also gained this year because of the US and international markets, that's just how balanced portfolios work. MAW104 is still carrying out the same overall asset allocation strategy as any standard balanced portfolio, it's just the components (and the details of the asset mix to a degree) happen to be actively managed.


As I said above, Mawers returns on their US and international funds aren't much above the benchmark and have mostly tracked it over recent years (US almost exactly, international they've done a bit better some years). Their bond fund, not surprisingly, also tracks canadian bond ETFs almost exactly.

Their outperformance is through their canadian fund (which is up ~3% while the TSX is down ~7% this year) and the global small cap fund. The new canada fund also does quite well though it's a small part of the portfolio.

The global small cap, while a "risky" fund, it's never actually lost a significant amount. It's worse years are 0% or down a couple %. The rest of the time it has either gained 20% or as much as 50%.

Will the canadian and global small cap funds continue to outperform? who knows. 



The obvious take home message is Mawer does quite well with their actively managed small cap funds and with the canadian market generally. The big markets, bond markets, etc, they don't really add any value and just track the indexes.

To me that makes sense as active management is most likely to work in smaller niche markets and less likely to work on large markets like the US.


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## Rhaegar (Feb 21, 2014)

In light of the above, I think that just building a normal low cost ETF balanced portfolio, and replacing the canadian with Mawers canadian, and a chunk of the international with their global small cap fund would get you the same or better performance as MAW104 but save on fees as you would only be paying the higher MER on that portion. 

You could keep your bonds and standard US and international portion in super cheap index ETF's.

Of course your portfolio has to be large enough that $5000 minimum correlates to the portions you want Mawer funds for. If that's max 20% then that's a 25k portfolio

5k Mawer canadian
5k global small cap (can be split with a standard ETF is the portfolio is bigger)
5k Standard US ETF
10k standard bond ETF

Will give a 20/20/20/40 mix and only 40% of your portfolio will be paying the higher MER, and that should be the part where it's more likely to be worthwhile. If you're not comfortable going all small cap with your international holding you can split it, but that requires a bigger portfolio (i.e 5k mawer, 5k standard international ETF if you have a 50k portfolio).


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## dogleg (Feb 5, 2010)

All good points.Thanks.


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## dogleg (Feb 5, 2010)

Dubmac: 'Don't chase yesterday's results' is always good advice, however, as far as MAW104 goes if you examine its 'long term' performance you might have said that about it some time ago and missed out on some nice gains. Hindsight!


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## latebuyer (Nov 15, 2015)

I believe there is such a thing as too large a fund as it makes it more difficult to make trades. This fund may be edging into that territory.


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## OnlyMyOpinion (Sep 1, 2013)

latebuyer said:


> I believe there is such a thing as too large a fund as it makes it more difficult to make trades. This fund may be edging into that territory.


Could be, but then it is a global fund. MAW104 is at $1.3B while a comparable fund like RBF460 is at $12.9B. Mawer has closed funds to new money in the past when they felt size and market liquidity might cause future performance to suffer (New Canada).


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## latebuyer (Nov 15, 2015)

I was actually referring to mawer canadian equity. I did read they have closed the fund to institutional investors so maybe the fund will be okay. I do think the big bank funds are already suffering from asset bloat -maybe that partially explains their poor performance.


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## dubmac (Jan 9, 2011)

dogleg said:


> Dubmac: 'Don't chase yesterday's results' is always good advice, however, as far as MAW104 goes if you examine its 'long term' performance you might have said that about it some time ago and missed out on some nice gains. Hindsight!


I meant it more as a maxim than advice. I read up on MAWER funds about 6 years ago - then they started winning awards for their performance (and their low MER'S). There was and to some extent still is considerable attention given to them from Morningstar analysts. 
http://www.marketwatch.com/story/mo...of-2015-morningstar-awards-2015-11-25-2220250.
I gues my point is to look at MORE than just returns when investing in fund or ETF. Please understand than I am NOT a model to follow for investing - but I will boast than my best decision was investing my RRSP's in MAW104 6 years ago. It's up nearly 10% this year while most others are down.

I would get nervous however if Jim Hall ever left the fund as it's fund manager - that's the downside of owning an MF - managers can make'em or break'em it seems


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