Q&A With Gordon Pape: Sentry U.S. Fund

Q – You recommended Sentry U.S. Growth & Income on Sept. 29, 2016, in The Income Investor. Could you please review this fund? I have held it since then. The MER is quite high and the income is low, 0.63% currently. I was thinking of replacing it with Mawer U.S. Equity since the income is not important even though it is in an RRIF. I do need the U.S. equity. Thank you. – Jane S.

A – The Sentry fund was added to the Income Investor RRIF Portfolio in August 2013 but was subsequently sold. It has performed well, with an average annual return of 10.45% over the five years to Oct. 4. The cash flow is $0.60 a year (current yield of 2.6%). That’s a respectable record but I decided that the cash flow is too low for an RRIF, where income plus security are the two priorities. That’s why we replaced it in the portfolio.

Although the Sentry fund has been a good performer, the Mawer U.S. Equity Fund has been better, with a five-year average annual return of 16.15% to Oct. 4. That puts it in the top 10% of all the funds in its category. Its cash flow is negligible (one annual payment, in December). However, you say that doesn’t matter to you, so on that basis, it is the better choice. – G.P.