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10 Top Performing Canadian Mutual Funds in 2021

Yes, energy and materials, but also some surprises.

Andrew Willis 30 December, 2021 | 4:38AM
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So far this week, we’ve seen the top 10 stocks and top 10 ETFs in Canada this year, in both their value-leaning glory overall and their heavy emphasis on energy. Now it’s time for the top 10 mutual funds in Canada and I’ll save you the suspense: there’s a lot of oil and natural resources. But there’s more than meets the eye…

We’ve uncovered some big differences between contenders in those classic Canadian sectors, and also found some strategies that have come out of the left field. To compare the funds, we’ll look at their returns to date, the cost of performance with the Management Expense Ratio (MER) and lastly combine these factors in a bigger view – the forward-looking Morningstar Quantitative Rating.

“The Morningstar Quantitative Rating, or the ‘Medalist’ rating, is a forward-looking assessment of a fund’s prospective ability to outperform similar funds,” explains Morningstar Canada’s Director of Investment Research, Ian Tam. Medalist ratings are based on five factors: people (the quality of management team), process (the effectiveness and consistency of the investment process), parent (organizational structure and talent retention), performance, and price (fees).

First, here’s the list of the 10 top-performing mutual funds:

Name

YTD Returns

MER

MQR

Ninepoint Energy Series F

162.74

2.07%

Neutral

Canoe Energy Portfolio Class F

89.79

1.73%

Neutral

Canoe Energy Income Portfolio Class F

65.31

1.74%

Neutral

CI Resource Opportunities Cl F

52.73

1.21%

Neutral

CI Global Energy Corporate Class F

50.56

1.24%

Neutral

Lysander-Canso Equity F

44.38

1.00%

Silver

Chou RRSP Class F

42.62

1.31%

Neutral

IG Mackenzie Global Natural Res Fd J NL

41.80

2.32%

Neutral

RBC Canadian Small & Mid-Cap Resources F

41.26

0.95%

Gold

CIBC Energy F

41.14

1.26%

Neutral

Morningstar Direct Data as of Dec 6, 2021

Top of the Charts

At the top of medalist mutual funds in Canada by a mile in terms of returns this year, Ninepoint Energy Series F (Series D also available) went into the triple digits in terms of returns. The fund had among the highest fees of the bunch, but it’s been busy with a turnover of 421% as of Dec 8th, 2021. The make-up of the portfolio is also much more small/mid-cap than the category while keeping it nicely concentrated with around 14 equity holdings (and 89% Canadian equity) as of November 30th. It’s also worth noting the fund scores very well on both risk and return vs. category.

Canoe Energy Portfolio Class F is nearer to Ninepoint’s small value stock style than the rest of the category, in addition to turnover topping 300%. The fund is in line with the category on its momentum and volatility levels (high). A similar Canoe energy mandate took third place as well.  Canoe Energy Income Portfolio Class F focuses more on yield, hitting 5.02% (twelve-month trailing distribution) as of Dec. 8. The fund has around 24 holdings as of Aug 31st, with about 12% in U.S equities (75% Canadian equity).
 

I See You, CI

In fourth place, CI Resource Opportunities Cl F has some energy, but it’s mostly (83.70%) materials as of Nov 30th. Leaning far towards growth compared to the rest of the category and index, the aggressive approach paid off with the best fees we’ve seen so far.

Next, CI wasn’t going to be left out of the action in energy this year, with a fifth-place performance that was a nice follow-up for CI Global Energy Corporate Class F from its top-quartile year in 2020. Keeping it mostly large-value, with the lowest turnover we’ve seen so far at 119% as of Dec 8th.
 

Enter, the Medalists

In sixth place, but also a well-deserved silver medalist, Lysander-Canso Equity F has been on an absolute tear since late 2020, slamming through the category in the fall of 2021 and with its sights on the index next. And with the second-lowest fees of the bunch. The fund’s got some energy (about 18% as of Aug 31st), but it’s heavy in industrials (35%) with a mix of financials, technology and communications taking the bulk of the rest. It’s also high conviction with a turnover of 12.32% on the same date.

Jumping ahead to ninth place is the only gold medalist on the list, and it has a rough split between energy and materials. RBC Canadian Small & Mid-Cap Resources F has a similar sector allocation to the last fund (although a third of the holdings #), but investors will probably prefer the fees which top the charts here, or perhaps its 98% allocation to Canadian equities as of Nov. 30th.
 

Everyone Else

In seventh place, but easily the most intriguing fund of 2021 with an amazing follow-up to Lysander-Canso, we have Chou RRSP Class F with an unbelievable moonshot in late 2020 that’s since stabilized. It’s led by stock-picker Francis Chou, with a style that’s mid-value but with a very wide range and extremely impressive conviction (reported turnover is 0.05% as of Aug 31st). As of Jun. 30, there are 20 holdings but about 40% is in Montreal-based Resolute Forest Products (RFP), with about 16% in Bausch Health Companies (BHC) and roughly 13% in BlackBerry (BB) among the top picks. 

Getting back to energy and natural resources, we have IG Mackenzie Global Natural Resources Fund with a much larger basket. It comes at the cost of higher fees, but you get around 100 equity holdings as of Sept. 30th, with 50% in energy and 45% in basic materials.

Lastly, a new addition to the energy fund space in mid-2020, CIBC Energy F is a large-value take on on the sector with a predominantly Canadian tilt (65% as of Nov. 30th). It’s been low turnover so far at 22% as of Dec. 8th with a portfolio of around 39 holdings.

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About Author

Andrew Willis

Andrew Willis  is Senior Editor at Morningstar Canada. He previously produced content for Fidelity Investments and finance industry events for Euromoney Institutional Investor and has written in the past for Thomson Reuters and CNN. Follow him on Twitter @Andrew_M_Willis.

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