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Finding the perfect balance in a lower-risk, single solution emerging markets fund

Taking a balanced approach to investing in emerging markets is critical to getting the highest possible risk-adjusted returns, while minimizing risk.

The Excel Blue Chip Balanced Fund, comprising of three asset classes, each with different risk profiles; managed by two experienced asset managers and characterized by low correlation among its holdings; broad diversification; and the potential to generate strong returns can be used as a single-solution recipe to successfully capture “the best of all worlds” in emerging markets.

The fund is unique in that it invests in three asset classes – stable, large cap blue chip companies with emerging markets exposure; emerging market bonds for greater yield and reduced risk; and emerging market equities for growth.

It obtains its income exposure through the Excel High Income Fund (30%); its equity exposure through the Excel Blue Chip Equity Fund (40%); and its pure emerging markets exposure through the Excel Emerging Markets Fund (30%). Effectively, by investing in the Excel Blue Chip Balanced Fund you are getting the benefits of investing in “three funds in one.”

Each of the three asset categories in the fund has a low correlation to each other, reducing both its risk and volatility, making it suitable for investors who want broad debt and equity exposure to emerging markets, while controlling the amount of risk they wish to take. The fund in itself has a low to medium risk rating.

The blue chip equity component of the fund holds global blue chip companies which have a competitive advantage in the market space in which they operate. These companies have geographically diversified revenue streams and are typically less risky than companies focused on a single market.

With investment opportunities in emerging markets growing at a more rapid pace than in developed markets, an increasing number of multinational companies are setting up operations in emerging markets from which they derive a significant portion of their revenues, allowing the fund to capture the growth of these companies for the benefit of investors.

In similar vein, many blue chip companies from emerging markets are diversifying their operations globally in areas in which they have a competitive advantage, thereby enhancing their growth prospects.

The emerging markets equity component of the fund invests in a diversified portfolio of high-quality emerging market companies which have strong growth potential. Emerging markets are the fastest growing asset class globally and have historically outperformed developed markets equities, providing the fund with strong growth potential.

The fixed income allocation in the fund comprises of a geographically diversified portfolio of emerging markets credit and investment grade local and hard currency sovereign and corporate debt, which provides a yield of two to three times greater than that of developed markets.

Another attractive feature of the fund is that it pays an annual distribution of 4.3%*, making it suitable for investors seeking a reliable stream of income, as well as the potential for capital appreciation.

Return   YTD Return 1 Year
Canadian Neutral Balanced   3.50 4.55
Excel Blue Chip Balanced A   10.10 12.31
Global Neutral Balanced   7.21 10.00


Risk   YTD Std Dev 1 Year
Canadian Neutral Balanced   5.01 4.55
Excel Blue Chip Balanced A   13.60 10.94
Global Neutral Balanced   7.32 5.96

Each of the three asset classes in the fund is managed by an experienced manager that is dedicated to delivering superior performance. The equity allocation in the fund is actively managed by Excel Investment Counsel Inc., which uses proprietary quantitative models, fundamental research and bottom up stock selection to determine optimal asset allocation. The fixed income allocation in the fund is managed by Amundi Asset Management, one of the world’s largest asset managers, which uses proprietary quantitative models and diligent decision-making and risk management processes to generate the highest possible risk adjusted returns.

The Excel Blue Chip Balanced Fund is a class of its own. It is the recipe for balanced investing in emerging markets.

* Distribution Yield - Series A as at July 31, 2015

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.

This document may make forward-looking statements and there are risks that actual results could differ materially from forecasts, projections or conclusions in the forward-looking statements. Certain material factors and assumptions were applied in drawing the conclusions or making the forecasts or projections in the forward-looking statements and you may find additional information about such material factors and assumptions and the material factors that could cause actual results to so differ from the sources provided. The above information should be considered as background information only and should not be construed as investment or financial advice. Further, it should not be construed as an offer or solicitation to buy or sell securities.

The information contained in this document is for informational and illustrative purposes only and is not intended to provide specific financial, investment, or other advice to you, and should not be acted or relied upon in that regard without seeking the advice of a professional. Particular investments or trading strategies should be evaluated relative to each individual.

Disclaimer

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.