AIC fund back in U.S. equity category

(May 4, 2005) The Canadian Investment Funds Standard Committee (CIFSC) has moved AIC’s American Focused fund back to the U.S. equity category in the wake of the departure of manager Larry Sarbit.

The fund was moved to the specialty/miscellaneous category last year because Sarbit held too much cash to meet the requirements of the U.S. equity category.

Also affected are AIC American Focused Corporate Class and AIC RSP American Focused and segregated-fund versions, says Morningstar Canada investment funds editor Rudy Luukko.

The change will be implemented by CIFSC-compliant firms as of the April 30 reporting period.

The fund’s new manager, Jamie Cole, told Morningstar on May 2 that the U.S. equity weighting of AIC American Focused as of April 30 was 53.7%.

At the end of the April, the fund held investments in 10 different companies. That’s up from three on March 28, when Cole assumed responsibility for the fund, says Luukko.

It’s also a dramatic shift from Sarbit’s cash-heavy strategy. When he announced plans to leave in March, more than 75% of the fund’s assets were in cash, in sharp contrast to the vast majority of money managers who typically invest more than 90% of the assets at their disposal.

Cole also confirmed that three of the current holdings in the fund are large-cap U.S. banks. He said that at the time of his purchase these three banks were trading at about 11 times estimated earnings for 2005 with dividend yields of about 4%.

Names of these and other holdings will be disclosed when AIC releases the April 30 update for the fund, Cole says.

When the fund moves to its new category, fund measurement firms including Morningstar will report its complete history since inception, Luukko explained. “As a result, the fund will once again receive a Morningstar Rating within the U.S. Equity category.”

Filed by Doug Watt, Advisor.ca, doug.watt@advisor.rogers.com