Hype hides unknown fund company

There are several small mutual fund companies in Canada that most investors know nothing about. In some cases, that’s no loss. But occasionally, I come across one that if definitely worth a look.

One example is a company called Opus 2 Financial. This is a relatively new operation, but it shows a great deal of promise. Some of the things I like about it include:

1)High-quality management team.
Opus 2 has obtained the services of a number of top money managers including the Bissett team from Franklin Templeton, Beutel Goodman, and Caldwell Investment Management.

2) Low MERs.
Most of their funds have a management expense ratio of less than 2 per cent.

3) No sales commissions.
Most of their offerings are no-load funds.

However, as with most companies, not everything in their line-up is worth buying. There are some stand-outs to look at, however.

Canadian Growth Fund:
The Canadian Growth Fund is one that is doing very well. The fund gained 14.8 per cent in 2000 and followed that with a 17.1 per cent advance in 2001. Those are remarkable numbers when you consir this is a growth-style fund in what was basically a value market.
Manager Fred Pynn of Bissett isn’t a gung-ho growth manager of the kind still buying high-tech stocks at their peak. He hedges his bets by only purchasing stocks that are reasonably priced.

So his style is more GARP (growth at a reasonable price) than pure growth.

Still, you can’t argue with the results. Top holdings include Saputo Inc., Dorel Industries, CN, CAE, and Power Corporation.

Next page: Other funds

Value Equity Fund:
The Opus 2 Canadian Value Equity Fund is also impressive. It’s run by Norm MacDonald of Beutel Goodman, one of the top value-management firms in the country.

It too stood up well in the bear market, with gains of 21.4 per cent in 2000 and 3.2 per cent in 2001.

The portfolio is decidedly blue-chip in nature, with names like Bank of Montreal, Enbridge, Manulife, and Suncor among the top 10 holdings.

This fund alongside Canadian Growth would make for a nice value/growth style mix in a portfolio.
Fixed Income Fund:
Another one worth looking at is the Opus 2 Canadian Fixed Income Fund. Despite the name, it actually holds a mix of bonds and stocks, as well as some royalty trusts.

Returns have been above average for the Canadian Bond category, with gains of 10.3 per cent in 2000 and 6.6 per cent in 2001. Management is by Dennis Freeman of Caldwell Investment.
Foreign content:
Unfortunately, the U.S. and foreign entries have not looked impressive so far, so you may want to look elsewhere for international diversification.
The funds are sold directly by the company. You can call for information at 877-296-7872 or visit their web site at http://www.opus2financial.com .

Adapted from the February issue of Mutual Funds Update.