In Asset Management, Bigger is Not Always Better

Here's a look at some of the best boutique managers we cover. 

Danielle LeClair 14 July, 2023 | 1:52AM
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Danielle LeClair: To some, bigger is better, but when it comes to selecting an asset management firm, that’s not necessarily the case. Both large and small asset managers can exhibit best in class practices that align the company’s interest with investors.

Globally only 5% of firms earn Morningstar’s top Parent Pillar ranking of High. In Canada, where investors tend to favor bank-owned asset management firms, Morningstar has identified a few boutique firms with top-notch investment cultures and consistent performance.

Mawer Investment Management earned Morningstar’s coveted High Parent Pillar Rating for its investment-centered culture and collaborative approach to finding high-quality, well managed companies. The firm’s mantra is “Be Boring. Make Money”, but the funds they offer have garnered attention for their top-decile performance. Mawer Global Equity, Mawer New Canada, Mawer Balanced and Mawer Global Balanced are among those investors should consider.

EdgePoint Wealth Management earned an Above Average Parent Pillar Rating for placing investors at the top of their business priority list. It’s a philosophy that has led to thoughtful hiring and investment processes and a commitment to investor education. Like Mawer, every fund follows a single investment philosophy – think like business owners and find misunderstood risks – and has earned top decile performance over the last 10 years.   

Beutal Goodman, the oldest firm highlighted here, also earned an Above Average Parent Pillar Rating. Strong succession planning has led to consistency in investment philosophy and portfolio construction, earning investors’ trust as a good value-style manager. Canadian-focused mandates have been a strength for the firm.

When considering who to trust with your investments, looking for firms that make investors’ needs their core business objective is a good first step. Just as David’s small size and smart wits proved to be a hidden advantage in his fight against Goliath, these firms’ independence, focus on investors and expertise in their circles of competence are unappreciated assets in a market dominated by a handful of giants.

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Danielle LeClair  Danielle LeClair is Director of Manager Research for Morningstar Canada

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