selkirk, opinion on Chou Associates?

[infinii]

Kirk,

Have you heard of this fund company? Small but I'm told it's well run and they have generated impressive returns. One downside is the min. investment of 10k and increments of 1k (guess it would mean you can't reinvest dividends).

BTW, I bought 100 shares of BNS.to today, they pay a decent dividend and the ex-div date is Apr 1. Just the start of my attempt to diversify my once tech heavy portfolio.

 

[infinii]

forgot link

http://www.choufunds.com

 

[selkirk]

Infinii if you buy it straight from the company there in no load.

not sure if you are doing through this with a broker, if so make sure you are not charged to much to get into the fund.

Chou funds are run by Francis Chou he likes to invest in deep value situations (stocks).

there are four funds, Chou Europe made 16%, and Asia 12.78% for one year. though these funds look interesting would avoid them since they have just started. no long term record.

Chou RRSP and Associates are similar funds. though Chou RRSP is classified as small cap and associates US equity.

Associates holds about half in the US, but where ever he see value in North America that is where it will be invested.

RRSP one held more cdn. because of foreign content restrictions of 30% in your RRSP. since these are over there will probably be a more focus on International stocks.


Associates made 1yr 8.8%, 3 yr 12.53%,
RRSP 1yr 9.33, 15.06%


Possitives

low mer most of the funds are around 1.70-1.80%
management expense ratio

also very good value fund manager

if some investors cash out early (less than six months they pay a penalty, this goes to the fund to benifit other shareholders, most fund companies just pocket these fees for themselves.

negatives

though CHou RRSP is a good fund has lagged the last two year.

Europe and Asia look good but have just started.

manager likes to hold large amounts of cash if he sees no value. this could also be a positive but this fund may underperform in a strong bull market.

manager sometimes takes large positions. he sometmes has positons over 5% and sometimes close to 10%. it is great if it works but sometimes taking large risks on a few positions.


other value funds families worth looking at Saxon min $5000, and Mawer (MAwer New Canada Fund ) small cap also believe $5000.

will post more info on these later.

the min for chou is $10,000, however dividends are reinvested (that is an option). the $1000 you refer to is if you wanted to add to the fund.

ie. 10,000 Associates fund
one year later you want to add to the fund, you must deposit, you can deposit any amount over $1000. (1000,1500,ect.)


by the way BNS has a great dividend fund low mer great record.

good way to hold financials, min is $500.

thanks
selkirk

 

[infinii]

wow, thanks for the DD Kirk.

I noticed that you are holding BNS Div Fund. Would you still recommend it given that I'm already holding some BNS stock?

 

[selkirk]

Infinii I would still look at the BNS dividend fund.

the fund
1. performance. beat the index (TSX/SP) for 1yr. 3yr. 5yr.
2. good steady returns 1yr. 15% 3 yr 11.9% 5 yr 13.7%

3. low mer, many cdn. equity mutual funds charge a mer of 2.55% (many times greater).

the smaller the mer management expense ratio, the dumber the manger can be, (easier to beat the index).

4. low minimum. $500, plus only $50 or more for reinvestment. for a low mer, and no load this is a low minimum. allows a small retail customer to buy a very good fund.

5. top holdings TD, MFC, BMO, RY, CM, Power Corp, SLF, BCE, Great West, ECA (Encana).

okay all of these are basically financials except Encana, Power Corp also gets most of its money from power financial (investors group, great west, forgot the third company..... :scared
and BCE telephone.

still most of these have growing earnings and dividends. if you look at a chart of the banks and compare them to the toronto market, they ussually outperform.

it is a good way to buy a basket of good stocks many financials, in a well managed fund.

by the way you could buy the index of financials on Toronto, however BNS divdend is still a good fund to start with.


I have more than one bank in my portfolio, however you raise a good point.
though not a bad idea to increase a position in this area would not go out and buy five bank stocks.

after this would look at a small cap fund

like Mawer new Canada fund, Saxon Small Cap, or maybe a Chou fund (s) you were looking at.

perfer Mawer New Canada to Saxon because it has had a better year, but both are good value funds. with no load and mer.


infinii there are several cdn. on MJ however it depends on timing as the stock forum is sometimes (for the most part ) quiet).

on your currency question, would keep most of my investments in the cdn. market.

however have some US investments, and I have not hedge the currency. one of the reasons bought them is to have exposure to the US dollar.

cdn. dollar is around .82 believe it may go to maybe .90 at most. but should trade in the .82-.85 range. if the dollar went to par which is a popular (incorrect) prediction Ontario, and Quebec manufacturing would grind to a halt.

especially Ontario would be in big trouble....on the positive side you could buy a house in Toronto....cheap....

thanks
selkirk