A new deep-value fund

Franklin Templeton recently expanded its deep-value Mutual line in Canada. Until now, only the Mutual Beacon Fund, which specializes in US stocks, has been available to investors here. Despite a loss of 19.8% in the past year (to Feb 28), it has outperformed the average of its category by a considerable margin (the average U.S. equity fund is down 27.3% over the year) and was a first-quartile performer during the 2000-02 bear market run.


Now it’s getting a stablemate, the Mutual Discovery Fund. This one can roam the world in search of deep value opportunities, and that includes distress situations where companies face bankruptcy and/or massive restructuring. The fund is managed by David Winters, who also co-manages Mutual Beacon, and Tim Rankin. All the funds in the Mutual line employ strategies developed by Michael Price, one of America’s great all-time value managers.


The philosophy is very similar to that used by Peter Cundill and his team in selecting securities for the various Cundill funds offered through Mackenzie Financial. Like Mutual Beacon, the Cundill funds have all been first quartile performers throughout this bear market. Anyone whohinks that stocks will continue to wallow through 2003 should seriously consider adding one or more of these deep value funds to their portfolio.


This article is excerpted from Mutual Funds Update, a monthly newsletter offering guidance on fund investing from some of Canada’s leading experts. For subscription information, go to http://www.buildingwealth.ca/promotion/50plusproducts.htm