Five domestic focused small/mid cap equity funds likely to outperform

These medalist mutual funds have surpassed the BMO Small Cap Index over 10 years.

Ruth Saldanha 15 October, 2018 | 5:00PM

Investors in the Canadian mutual fund market have a variety of options to choose from, depending on their risk appetite. Investors who can tolerate more risk look to invest in small- and mid-cap funds, as these have the potential to give higher returns but come with higher risks.

As of Sept. 28, the BMO Small Cap Index has lost 0.04% from a year earlier and has lost over 5% for the year to date. Over a longer timeframe, however, the Index has produced a total annualized return of 6.6% over the past 10 years, higher than the S&P/TSX Composite Index, that produced a total annualized return of 6.3% over the past 10 years.

So what are some of the funds that have done well, and have the potential to do well in the space? To answer this, we took at a look at the Canadian focused small and mid-cap equity funds. These funds must invest at least 50% and less than 90% of their equity holdings in securities domiciled in Canada, and their average market capitalization must be lower than the Canadian focused small/mid cap threshold.

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About Author

Ruth Saldanha

Ruth Saldanha  is Senior Editor at Morningstar.ca. Follow her on Twitter @KarishmaRuth.

 
 
 

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