Top mutual fund picks for RRSPs

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Monday may not be everyone's favourite day, but it's a godsend for investors racing to make last-minute contributions to their registered retirement savings plan (RRSP).

Today is the deadline to stash new cash into an RRSP, and claim a deduction for the 2009 tax return. If you haven't yet figured out where to invest those dollars, you can park them in a money market fund and decide later.

Because mutual funds are still an easy way for many people to invest, we asked four fund watchers to give suggestions for an RRSP.

James Gauthier, vice-president investment funds, DundeeWealth Inc.

CI Signature Select Canadian

The fund run by Eric Bushell is definitely a core holding, he said. "You are getting broad geographic exposure and it tends to hold big-cap companies." This Canadian-focused equity fund, which allows up to 50 per cent in foreign stocks, is taking full advantage of the foreign content, he added. "Management also hedges currency exposure tactically." Mr. Bushell and his team of analysts have done a "very nice job" with performance in the first quartile over two, three, five and 10 years, he added.

BMO Guardian Global Absolute Return

The global equity fund run by Mathew Haynes of New York-based Lazard Asset Management is "a do-anything and go-anywhere fund," he said. Mr. Haynes joined Lazard after his stint with Franklin Mutual Advisers LLC, where he co-managed the giant Mutual Beacon Fund from 2001 to 2004. He is a deep-value investor scouring the globe for large- and small-company stocks, but can't have more than 15 per cent in cash, he said. The fund, launched in 2006, is top quartile over one and two years, and second quartile over three."

Dan Hallett, director, asset management, HighView Financial Group

Mawer Canadian Balanced RSP

"This is a terrific one-decision fund" that invests in other stock and bond funds run by Mawer Investment Management, he said. "It boasts a low fee of 1 per cent, terrific management and broad diversification." Investors in this global neutral balanced fund "get a bit of every asset class managed by a top-notch firm that adds value from its selection of investments and allocation between asset classes," he said. If purchased through a broker, the minimum investment for this no-load fund is $5,000 and a trading fee may charged.

Mackenzie Universal Canadian Value Class

This Canadian-focused equity fund is run by Tim McElvaine who worked alongside well-known, deep-value investor Peter Cundill for many years. Mr. McElvaine took over this fund - formerly Maxxum Canadian Value Class - about a year ago, but didn't have the flexibility to invest in smaller-company names until the mandate was changed last June, he said. "A flexible mandate, small asset base and a skilled money manager combine to make this a great core holding."

Neal Brandon, fund analyst, Morningstar Canada

Mackenzie Ivy Foreign Equity

The global equity fund, which is run by manager Paul Musson and his team, looks for high-quality businesses, and follows a very, risk-conscious investment process, he said. "They tend to stay clear of companies that exhibit only cyclical growth characteristics ... They are looking for businesses that have strong balances sheets, leaders in their industry and those that can perform well through all phases of the business cycle." The value-oriented fund, which is top quartile over 10 years, has a concentrated portfolio of about 20 to 25 companies that includes names like McDonalds and Nestlé, he said.

Beutel Goodman Canadian Equity

This value-oriented, Canadian-focused equity fund is run by Mark Thomson who looks for large companies with recurring cash flows, dominant market share, and high-quality franchises, he said. "He is looking for companies that can hold up in a weaker economic climate." This lower-fee fund, which can be purchased through a discount broker, requires a minimum investment of $10,000. The fund, a top-quartile performer over 10 years, has "superior downside protection and relatively low volatility," he added.

Dave Paterson, fund analyst, D.A. Paterson & Associates Inc.

CI Harbour

This Canadian-focused equity fund is a "great core holding for most investors," he said. Gerald Coleman is a solid value-oriented manager who has run a concentrated portfolio of 25 to 40 names since the fund's inception in 1997, he said. "The style tends to provide good [market] participation on the upside, and protects capital relatively well on the downside." The manager is not afraid to let cash rise to preserve capital, but it can be a drag in rising markets, he said. "It's a fund that has been at or near the top of my list for years."

BMG BullionFund

The fund, which invests equally in gold, silver and platinum bullion, is not a core holding, but a narrowly focused sector fund for aggressive investors, he said. It should be limited to 5 or 10 per cent of an investor's portfolio, he added. "The fund will provide some protection against inflation and any declines in the U.S. dollar." While several gold bullion mutual funds have been launched over the past year, he prefers BMG BullionFund launched in 2002 because of its diversification and because it has been around the longest.

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MUTUAL FUND PICKS FOR AN RRSP