Advisor warning against top-performing fund

Zoomer | January 1st, 2006

Question: I would like to pose a couple of questions. I’ve just met with my financial advisor and expressed an interest in the Chou RRSP Fund. My advisor said to stay away from the Chou funds because you can’t get any information as to what they invest in. If your newsletter, Morningstar, and others give this fund a 5-star rating, what’s the problem? Secondly, I have a large whack of Trimark Select Balanced. Are there better funds in this category ? – E.A.

Answer:

We recommended the Chou funds in the Mutual Funds Update (MFU) newsletter several months ago. There are two of them, and both have been among the leading performers in their categories. The Chou RRSP Fund shows an average annual gain of 24.6% for the three years to Feb. 28, which is remarkable in this market. The Chou Associates Fund, which focuses more on U.S. stocks, shows an annual profit of 21% over the same period.

Both funds publish annual and semi-annual reports showing their complete portfolios. These can be found by doing a search at www.sedar.com – a fact that any advisor should know.

Trimark Select Balanced Fund has been a below-average performer in the past year with a ls of 10.9%, and it is not on the MFU Recommended List. Trimark Income Growth has been a consistently stronger performer. If you want a Canadian balanced fund from within the AIM/Trimark group, you may want to look at it.