Morningstar Awards: Mawer wins Domestic Equity Fund Manager

Mawer's Jeff Mo and Martin Ferguson cite their firm's overall philosophy in the success of their award-winning fund, Mawer New Canada.

Ashley Redmond 27 November, 2014 | 6:00PM

 

 

Ashley Redmond: I'm Ashley Redmond for Morningstar.ca and I am here with Martin Ferguson and Jeff Mo. They just picked up Morningstar's Domestic Equity Fund Manager of the Year for Mawer New Canada. Congratulations guys.

Jeff Mo: Thank you Ashley.

Redmond: So we can't talk about Mawer New Canada without talking about performance. At last check the fund is top 5% in the category year-to-date, but also top 5% in the category going back one, three, even 15 years. So Jeff, tell us about your investment approach with this fund?

Mo: The investment approach we have for the fund is the same as the entire firm. We look for wealth creating companies, but [with a] discounted intrinsic value run by excellent management teams. And when we say wealth creating companies, what that really means is companies with competitive advantages. Basically we are looking for high quality companies, but at a reasonable price.

Redmond: The short term and long term track with this fund record is pretty remarkable. Do you attribute some of the success to Mawer's overall disciplined investment approach?

Mo: Absolutely. The philosophy and process is the same across the entire firm. We've been doing the same thing year in and year out. And part of the reason I think [is that] I attribute the success of the fund to our very long-term investment horizon. Our average holding period is over five years, which by my understanding is a little bit higher than the industry average. That allows us to buy companies and look for dips, and then when the companies create wealth over time, we benefit from that.

Redmond: Great. And Martin you've managed this fund for over 15 years and you brought Jeff onboard a few years ago. So, what are some of the advantages of having both of you co-managing the fund?

Ferguson: Very good question Ashley. Jeff and I have been working together since 2008 and he became my co-manager in 2012. I have always gone by the philosophy that you hire people smarter than yourself. So, hiring Jeff has added another dimension. We do a system called dissent and challenge, if one person has an idea the other person challenges and dissents it until you come up with the best idea possible. That is definitely an advantage. Another advantage is Jeff's decision making because when I'm out of the office say visiting a company, either one of us can make a decision on the portfolio.

Redmond: What should investors expect from you in 2015?

Ferguson: Well we're probably in the midst of a very long extended economic cycle. The market has certainly risen nicely outside of the resource sector to a point where valuations are fairly full. So, 2015 I actually think you are going to get positive returns, but probably fairly muted returns in 2015.

Redmond: Fantastic and congratulations again.

Mo: Thank you Ashley.

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Ashley Redmond

Ashley Redmond  Ashley Redmond is a Vancouver-based freelance writer.