Standard Life Canadian Equity Class

hile neither market has taken a
strong direction upwards nor
downwards, 2011 has shown there are
lingering concerns throughout the
globe that may cause more volatility,
and perhaps, more concerns for
investors. Investors have not yet
forgotten about the difficult year that
was 2009.
16 The Quarterly Review
The Tactical Income Fund versus a
Monthly Income Fund
As stated earlier, Monthly Income Funds have
become very popular for investors seeking a
balanced approach to investing – to generate
income and a stable distribution. While this is
great for investors seeking a balanced approach,
it also means that most investors of Monthly
Income Funds are subject to considerable equity
exposure within their portfolio. For example, the
very successful Standard Life Monthly Income
Fund falls into the Canadian Neutral Balanced
category within Morningstar, where most
Monthly Income Funds are found.
Within the first 6 months of 2011, we have
experienced sovereign debt difficulties within
European countries, a Japanese earthquake, a
Canadian election, high U.S. government debt
levels with the risk of default, and a rapidly
rising Canadian dollar causing concerns for
exporters, among other issues.
Average Canadian Neutral Balanced Mutual Fund
Source: PALTrak, June 2011
Canadian Equities
(38.6%)
U.S. Equities (9.0%)
International Equities
(5.9%)
Cash (8.4%)
Preferred Equities
(1.4%)
Fixed Income (34.8%)
Investment Fund
(0.9%)
Other (1.0%)
By looking at the pie chart above, we can see
that the average mutual fund within this category
holds approximately 60% in equities. For those
investors whose first priority has become income
generation, this may not be ideal.