This fund is a part of the latest Morningstar Prospects. Read more about Morningstar Prospects here.
Five-star, silver-rated Leith Wheeler Canadian Equity Series B is an equity fund that invests primarily in Canadian companies. According to Leith Wheeler, utilizes a value approach to stock selection, applying bottom-up, fundamental analysis to all investment decisions. It aims to protect capital while generating superior investment growth by investing in companies with stable earnings, a long-term business model, and a capable management team.
The fund came to Morningstar analysts Michael Dobson and Danielle LeClair’s attention because it has had a big comeback since 2020. Its trailing three-year returns for Series B rank in the category's top decile. The fund was closed to manage capacity in the past but reopened in 2018.
So far in 2023, the Leith Wheeler Canadian Equity Series has returned 3.62%. In 2022, the fund outperformed both its category and index, losing 2.68%, when the category lost 4.98% and the index was down 5.55%. The fund has a management expense ratio of 1.49%.
Why is Leith Wheeler Canadian Equity Series Worth Considering?
The Leith Wheeler Canadian Equity Series employs a bottom-up concentrated approach that looks for quality companies undervalued because of what the team believes are temporary factors.
“Portfolio manager David Jiles leads a team of four sector analysts including named portfolio managers Richard Liley and Nick Szucs. The equity analysts average 25 years of experience,” Dobson and LeClair point out.
“Steady execution of approach and a wealth of experience are behind the fund's short and long-term success. Carefully considering valuation has helped the fund avoid spectacular Canadian flameouts, such as Nortel Networks and BlackBerry. Holdings data shows that the team’s approach does not lend itself to significant style biases, which increases its robustness over time,” they say.
They add that the fund has consistently beat its prospectus benchmark – the S&P/TSX Capped Composite Index. Since the fund’s 1994 inception, the B shares generated positive 10-year alpha over 98% of the time.
However, investors should note that the fund’s expenses are hefty. The sole publicly available share class charges a 1.49% annual fee that ranks in the category's most expensive decile.
