In Step 4 I discussed how finding and keeping a good manager is “all about the people”.
The other day I was driving in Toronto and noticed several signs advertising Fidelity Mutual Funds and specifically that one could invest with “Joel”, a famous portfolio manager. I was thrilled to see the investment industry catching on that it’s not about the firm name, Fidelity, but it is about the person driving the strategy. Yeah!
I decided to look up Joel on the web. I found that he is the portfolio manager of Fidelity’s famous Northstar fund for Canadians. I then went to Morningstar.ca to find more information about the fund. To be a member of this website costs just over $100 a year and it’s a great resource for mutual funds. If you use a discount brokerage account, you may have a similar service online with your discount broker on a complementary basis.
Once you are in Morningstar.ca, click on Funds, then click on Fund look up within the Tools section at the bottom of the page. Select Fidelity as the sponsor fund company and Northstar as the search name. To my surprise, I found over 100 “Northstar” funds. Which one to select? Most of them are the same fund just offered by different insurance or mutual fund companies. As well there are different classes/series of the same fund. Class/Series A are for smaller investment sizes like $500 and come with higher fees. Class/Series F are for clients with an advisor and have higher minimum investment sizes and lower fee – generally – always read the fine print. There may be other series and the difference will be the minimum investment amount and the fees.
The following link leads to the page of the fund I selected.
Few things to notice:
- I wonder what Northstar stands for? The asset class (mandate) of the fund is global (US and international) small-mid cap companies. No relationship to the name. Watch out for this with all funds – the name sometimes has nothing to do with the mandate of the fund
- This is a Class A fund and the minimum investment allowed is $500. The Management Expense Ratio ‘MER’ is 2.56% per year
- This is an interactive page and I have written some text to guide you
- The red arrows near the top point to 10 tabs you can click on for further data including performance peer group charts under performance. Peer Group Charts help you understand what a manager did each year (annual) and over time (annualized) against his/her peers and the market index/benchmark
- Near the bottom of the page you’ll see who manages the fund – Joel and Daniel – ask your advisor what performance history is related to Joel
Take time to learn about who you are investing with, and whether they are good.
Take time to learn what you want to invest in to make sure its right for you.
This will lead to decisions you can live with for a business cycle (7-10 years) or more, so that your portfolio will truly do well for you financially and meet your financial objectives.
 Please note that MorningStar Direct and eVestment are good resources for managers that manage segregated or pooled portfolios. These services cost more and are appropriate for family offices.
 The word ‘cap’ is used in the investment industry to mean capitalization which in turn means the size of the company.
 I will write a blog dedicated to reading peer group charts.