Al Edwards, Financial Editor
Lee Chin
CANADIAN MUTUAL fund company AIC, headed by NCB chairman, Mr. Michael Lee-Chin has come under some heat recently for its lacklustre performance over the last few months but Mr. Lee Chin insists that he will be pursuing the same strategy he has stuck with.
Indeed he refers to research conducted by Canada's Globe and Mail which reveals that the popular AIC Advantage fund has ranked in the top 25 Canadian funds over the last 15 years.
Figures released last month by the Investment Funds Institute of Canada (IFIC) shows that AIC suffered Cdn$304 million in net redemptions at the start of the year. AIC now has Cdn$11 billion in assets under management coming from Cdn$15.5 billion in its hay day.
LACK OF PATIENCE
The Canadian media has set upon AIC and point to the fact that while AIC has taken a beating, the Canadian mutual fund industry has seen new sales of between Cdn$1.3 and $1.7 billion for the month of January. Mr. Lee-Chin has answered his detractors by pointing to a lack of patience on the part of investors and says they should display more long term vision.
He will stick to his credo, "Buy, hold, and prosper," and says his company will not change its behaviour. "We manage Cdn$11 billion for 1 million Canadians. Over 95 per cent of our assets are invested in long term equity funds. However as you may know, for the last five years the stock market in North America has gone nowhere.
"That creates fatigue and frustration for investors. So yes clients are leaving but not at an inordinate rate but that is not unique in the fund management business," said Mr. Lee Chin unpreturbed .
Last month Canadian national newspaper, The Globe and Mail conducted research into the best performing mutual funds over a 15 year period which placed AIC's Advantage fund in 16th place out of the top 25 performers. The funds were ranked by 15-year compound average annual returns to December 31, 2004.
Over a 15 year period , AIC Advantage fund has posted returns of 12.8 per cent which is credible. The Globe and Mail exercise seems to lend credence to Mr. Lee-Chin's maxim that an investor should choose well and stick with it.
DISGRUNTLED INVESTORS
Commenting on the performance of AIC funds, Sterling Asset Management's managing director Mr. Charles Ross said: "I know there has been a strong outflow of funds from AIC and that there are disgruntled investors who are not happy with its returns. It would be interesting to know how other Canadian funds are performing. AIC now has some Cdn$10 billion in assets under management so it hasn't too much to worry about."
Dehring, Bunting & Golding's executive chairman, Peter Bunting commented: "I don't tend to track the movement of international mutual funds but I will say that I think AIC should be required by the Financial Services Commission (FSC) to post its unit price, yield and so forth very much like Jamaica Unit Trust use to do. I think that format would be useful for all Jamaicans looking to buy into AIC."
