Mackenzie Canadian Balanced Large Cap Growth
Investment Objective
We seek to provide superior risk-adjusted returns by investing primarily in high quality, larger capitalization Canadian companies combined with the safety and income of investing in Canadian government and corporate fixed income securities
Portfolio Advantage
- Lower active risk, defensive alternative to traditional Canadian balanced mandates
- Portfolio combines the investment talent of two deeply experienced teams
- Cyclical/non-cyclical approach translates into consistent value add from stock selection
Approach
Equity
- Strategy applies a bottom-up, GARP approach with a focus on quality companies that have simple, easily understood business models, earnings and cash flows steadily growing faster than their peers, and the ability to finance growth internally
- Combines core positions in long term, secular growth stocks with tactical positions in shorter duration, cyclical growth ideas
- Target 40-50 securities predominantly with market capitalizations over C$1 billion
- Well diversified by company and sector
Fixed Income
- Follows a value investment style utilizing both top down and bottom up approaches to issue selection
- Seeks to capitalize on opportunities across the Canadian fixed income universe to create a portfolio which is well diversified across sectors, risk factors and investment horizons
- Will allocate to non-core fixed income (MBS, CMBS, Maple Bonds) as a way of diversifying and achieving enhanced yields
- Philosophy is tethered to the belief that corporate bonds provide a better risk/return result relative to government resulting in a historical overweight to corporate bonds
Investment Process
Equity
S&P/TSX
+
MSCI World
Initial Filters
150
+
1200
- >$1 billion market cap (S&P/TSX)
- Minimum benchmark weight (MSCI World)
- Liquidity considerations
- Exclude Small Cap mining stocks
Quantitative Screens
75
+
150
- Earnings Growth
- Cash Flow Growth
- ROE
- Dividend Yield
- Reinvestment Rate
- LTD/Total Capital
Fundamental Analysis
40-60
Stocks
- Historical and prospective financial statement analysis conducted to identify and isolate the main drivers of earnings growth
- Meet with management
- Research reports maintained
- Price targets established
Technical Analysis
- A number technical indicators are examined to identify optimal entry/exit levels
- Trend/trend reversal
- Relative strength
Fixed Income
Cdn Fixed
Income
Universe
Macro View
Cdn Core+
Universe
- Interest rate exposure is managed actively
- Proprietary models used to guide portfolio term-to-maturity decisions
- Economic analysis helps to shape the context for valuing government and corporate sectors
Sector Selection
300
Issuers
- Expanded core + universe creates more risk reduction possibilities and increased diversification
- Portfolio yield is enhanced through access to a wider array of potential investments
Security Selection
75-100
Issuers
- Proprietary corporate bond analysis on potential investments
- Corporate bond analysis is applied to active portfolio management
Quarterly Updates
Assets
$725 million as of September 2012
Benchmark
Blend 35% TSX Composite TR Index + 45% DEX Universe Bond TR Index + 20% MSCI World TR Index
Inception
January 1988
Portfolio Team
Equity
Chuck Roth, CFA
• Portfolio Manager
• Industry experience: 28 yrs
• Firm experience: 14 yrs
Chris Sit, MA, CFA
• Portfolio Manager
• Industry experience: 9 yrs
• Firm experience: 9 yrs
Fixed Income
Steve Locke, MBA, CFA
• Portfolio Manager
• Industry experience: 17 yrs
• Firm experience: 8 yrs
Felix Wong, MBA, CFA
• Associate Portfolio Manager
• Industry experience: 25 yrs
• Firm experience: 12 yrs
Gordon Mack,
MBA, CFA, CMA
• Senior Credit Analyst
• Industry experience: 23 yrs
• Firm experience: 12 yrs
Dan Cooper, CFA
• Senior Investment Analyst
• Industry experience: 14 yrs
• Firm experience: 11 yrs
Jonathon Ennis
• Associate Investment Analyst
• Industry experience: 4 yrs
• Firm experience: 3 yrs