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February 2017 Manager Check-Up

New additions to our coverage universe include funds from PH&N, Sun Life and CIBC.

Christopher Davis 13 February, 2017 | 6:00PM
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Christopher Davis: Welcome to the Morningstar Manager Check-Up. For this month, it's about some new funds we've added to our coverage.

First up is PH&N Vintage. This fund shares the same management team and a similar process as Bronze-rated PH&N Canadian Equity. But we like this one a bit more because of its more distinctive portfolio. That's why we give it a Silver rating. The managers stand out for meticulous bottom-up research and disciplined execution. Where they stand out most, though, is in artful portfolio construction. Management relies on what they call their playbook, a guide to investing in stocks or sectors based on the economic environment, and look closely at valuation relative to a company's growth rate to size their positions.

Next up is Sun Life MFS U.S. Value, which we've rated Silver. The U.S. Equity category has few active managers with a chance of outperforming, but we think this fund is an exception. The fund benefits from seasoned management and strong research capabilities. Management prioritizes investment quality and moderate valuations over distressed businesses selling at fire sale prices. This approach has been a success at a U.S.-based fund that looks just like this one.

Last, we turn to CIBC Global Bond and Renaissance Global Bond. These funds are sub-advised by Brandywine Global Investment Management and mostly hold government bonds. Management looks for high real yields with strong or improving fundamentals. This puts their portfolios at odds with market benchmarks that give the most indebted countries the highest weightings. These funds have been volatile at times, but they've generated high risk-adjusted returns. The real negative in both cases is relatively high cost, which limits our ratings to Bronze.

For Morningstar, I'm Christopher Davis.

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Christopher Davis

Christopher Davis  Christopher Davis is Director of Manager Research at Morningstar Canada.

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