WPs allotted a great deal of time the past couple of weeks discussing mutual funds and ETFs. As part of this coverage we thought we’d look at a unique mutual fund that’s been in business for almost 80 years. There’s only one problem? You can’t buy it in Canada.
WPs allotted a great deal of time the past couple of weeks discussing mutual funds and ETFs. As part of this coverage we thought we’d look at a unique mutual fund that’s been in business for almost 80 years. There’s only one problem? You can’t buy it in Canada.
While ETFs are the cheaper alternative to high-cost mutual funds, there are times when paying a bit more makes sense. The Corporate Leaders Trust Fund Series B is one of those times.
Voya Financial, formerly ING’s U.S. business until it was spun-off in 2013 and then rebranded this past year, manages the $1.8 billion fund, created in 1935 when the founders bought an equal amount of shares in 30 of the leading companies of the day; none ever to be sold except in instances of bankruptcy, merger or spinoff.
Today, there are 22 companies in the fund. You can read about its history here.
Without dwelling too deeply into the inner workings of the fund it’s safe to say to say that its performance is all-world, generating annualized total returns of 10.3% over the past decade. In fact, Morningstar gives it five stars for its past performance. If you invested US$100,000 in 1970, it was worth US$1.1 million at the end of 2013, 48% more than the S&P 500.
The biggest wrinkle?
Investors own a pro rata share in the common stock of each of the 22 companies held by the trust rather than units in a mutual fund corporation. When the trust accumulates enough cash through dividends and inflows of capital to buy 100 stock units (100 shares in all 22 companies), it automatically goes ahead and makes the buys.
There’s absolutely no active management providing investors with the ultimate buy-and-hold solution. Sure, there are sectors that aren’t represented in the holdings but it’s an impressive list nonetheless.
While some might balk at the annual MER of 0.50% given its passive investment strategy, it’s proven over the long haul that it can deliver the goods.
Unfortunately, as I said, it’s not available in Canada and that’s a shame.
While ETFs are the cheaper alternative to high-cost mutual funds, there are times when paying a bit more makes sense. The Corporate Leaders Trust Fund Series B is one of those times.
Voya Financial, formerly ING’s U.S. business until it was spun-off in 2013 and then rebranded this past year, manages the $1.8 billion fund, created in 1935 when the founders bought an equal amount of shares in 30 of the leading companies of the day; none ever to be sold except in instances of bankruptcy, merger or spinoff.
Today, there are 22 companies in the fund. You can read about its history here.
Without dwelling too deeply into the inner workings of the fund it’s safe to say to say that its performance is all-world, generating annualized total returns of 10.3% over the past decade. In fact, Morningstar gives it five stars for its past performance. If you invested US$100,000 in 1970, it was worth US$1.1 million at the end of 2013, 48% more than the S&P 500.
The biggest wrinkle?
Investors own a pro rata share in the common stock of each of the 22 companies held by the trust rather than units in a mutual fund corporation. When the trust accumulates enough cash through dividends and inflows of capital to buy 100 stock units (100 shares in all 22 companies), it automatically goes ahead and makes the buys.
There’s absolutely no active management providing investors with the ultimate buy-and-hold solution. Sure, there are sectors that aren’t represented in the holdings but it’s an impressive list nonetheless.
While some might balk at the annual MER of 0.50% given its passive investment strategy, it’s proven over the long haul that it can deliver the goods.
Unfortunately, as I said, it’s not available in Canada and that’s a shame.
