(May 4, 2005) The Canadian Mutual Fund Standards Committee (CIFSC) moved the AIC American Focused fund back to the US equities category following the departure of manager Larry Sarbit.
Last year, the fund was moved to the Specialist/Miscellaneous category because Sarbit had too much cash to meet the requirements of the US equities category.
This also applies to the AIC American Focused Corporate Class and AIC RSP American Focused versions and the segregated fund versions, says Rudy Luukko, Morningstar Canada mutual funds editor.
The change will be implemented by CIFSC-compliant companies starting with the reporting period starting April 30.
On May 2, the fund’s new manager, Jamie Cole, told Morningstar that AIC American Focused’s U.S. equity holding as of April 30 was 53.7%.
At the end of April, the fund invested in 10 different companies. That’s up from three on March 28, when Cole took over responsibility for the fund, Luukko says.
This is also a radical change from Sarbit’s cash-based strategy. When he announced his plans to leave in March, more than 75% of the fund’s assets were in cash, a stark contrast to the vast majority of fund managers who typically invest more than 90% of their assets.
Cole also confirmed that three of the fund’s current portfolio companies are large-cap U.S. banks. At the time of purchase, he said, the three banks were trading at about 11 times estimated 2005 earnings and had a dividend yield of about 4%.
The names of these and other holdings will be released when AIC releases an update on the fund on April 30, Cole says.
When a fund moves to a new category, fund pricing companies, including Morningstar, will provide a full history of the fund since its inception, Luukko explained. “As a result, the fund will once again receive a Morningstar Rating in the U.S. equities category.”
Submitted by Doug Watt, Advisor.ca, doug.watt@advisor.rogers.com
(03/05/05)
