Newly rated TD, Beutel Goodman funds snag Gold ratings

Another Beutel offering stays Neutral after a management shuffle.

Christopher Davis 14 December, 2016 | 6:00PM
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Following the launch of Morningstar Analyst Ratings for ETFs in October, Morningstar's manager research analysts updated their assessments of 15 mutual funds under coverage in November and early December. Analysts introduced two new Analyst Ratings while reaffirming an prior rating and putting another fund Under Review after changes in management.

TD U.S. Mid-Cap Growth (Gold)
Morningstar Canada first rated this offering in November, but our U.S.-based colleagues have covered the strategy managed by the respected subadvisor T. Rowe Price since the 1990s. Manager Brian Berghuis has led U.S.-domiciled T. Rowe Price Mid-Cap Growth since its 1991 inception and this fund since 1993. All along, Berghuis harnesses T. Rowe's large, capable analyst team to identify a mix of steady growers and up-and-comers. Using a valuation-conscious approach keeps volatility relatively low by growth fund standards. Long-term performance has been stellar relative to the U.S. Small/Mid Cap Equity category, though less impressive versus the cost-free S&P Mid-Cap 400 Index thanks to above-average fees in its commission-based series. The F series, though, offers a better deal. The fund's experienced, capable manager and long record of success outweigh our concerns over price. An added bonus is its diversification potential: Canadian investors often rely on large-cap-focused strategies for U.S. equity exposure.

Beutel Goodman Canadian Dividend (Gold)
Although this offering is new to our coverage list, managers Mark Thomson and Stephen Arpin are no strangers to us. The duo, along with teammates William Otton, James Black and Pat Palozzi, were named Morningstar Domestic Equity Managers of the Year in 2013. Thomson and Arpin lead Gold-rated Beutel Goodman Canadian Equity, employing a similar strategy. This fund distinguishes itself from its purely domestic sibling by investing up to 30% of the portfolio in U.S. and international stocks, and by requiring a dividend of at least 1.5% at the time of purchase. Given the hefty sums Beutel manages in Canadian equities, these broader hunting grounds give the managers flexibility to invest where capacity constraints aren't a concern. This fund's Gold rating reflects our confidence that the managers can continue to harness their experience and discipline to produce peer-topping results.

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Christopher Davis

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

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