Mackenzie Ivy Foreign Equity Fund money manager report
January 6, 2012 by Dave
Filed under Investing, Mackenzie Investments, Money manager reports
On December 7th I participated in a conference call with the team that manages the Mackenzie Ivy Foreign Equity Fund. The fund has been among the best global equity funds over a long period and has done so with much lower than average price volatility. Since the beginning of the tech decline in 2000, the fund is up about almost half while the MSCI World Index is still down close to a third – a remarkable accomplishment.
The Ivy team seeks to invest in companies that have:
- high quality, multinational growth companies having a a sustainable and strong competitive advantage
- conservative borrowing practices and healthy financing
- a price and valuation that makes compelling investment sense
- a business that is easy to understand
- a trustworthy management team
They have chosen not to invest directly in emerging markets at this time, preferring the higher legal protections, disclosure and accounting practices and corporate culture of the developed countries. Most of the businesses owned in the fund do have customers all over the world or may buy from emerging market countries where they have a competitive advantage. The managers have no bias towards any particular industry or country, and so represent the best investments the managers can find on the planet.
The managers may spend years researching and following a company and so are highly comfortable with the decision to invest in that business. The fund typically holds on to an investment for several years once it is bought for the fund. An example is McDonald’s, which was bought for the fund five years ago and has done very well since then. McDonald’s has transformed itself in the last several years and found new ways to grow the business. I know a McDonald’s in Orleans that has a stone fireplace, suspended mood lighting and a feel much more like a relaxing living room than a fast-food joint for young families.
I continue to have confidence in the team that manages the Ivy Foreign Equity Fund.