Michael Dobson: Morningstar’s 2025 Canadian Balanced Fund Landscape dives into assets, flows, positioning, and performance. To the last point, returns varied widely in 2024. The difference between the best- and worst-performing global neutral balance fund was 22 percentage points. And so, picking a good balance fund can make a big difference. Here are three of our top ideas.
We will start with the Fidelity managed portfolios. The series benefits from stellar equity managers and a deep bond team. Managers David Wolf and David Tolk add another element here as well, carefully crafting and adjusting portfolio exposures to align the strategies with their broader macro views, including an active decision to benefit from weakness in the Canadian dollar in 2023 and 2024.
Performance reflects the prowess. Over the last 10 years ending January 2025, the Fidelity Global Balance F-Share Class beat its Morningstar category index by over a percentage point annualized after fees.
Next, we’ll talk about a strategy that has flown under the radar here in Canada: the T. Rowe Price Global Allocation Fund. A sub-advisor change in 2023 saw Charles Shriver’s multi-asset group take over this allocation strategy. It too relies on excellent security selection and an impressive asset allocation effort. 15 underlying strategies comprise the portfolio, including a healthy weight to alternative funds, all managed in-house at T. Rowe Price.
Shriver is an experienced asset allocator, who along with Toby Thompson sets tactical tilts. An advisory committee helps bring this all together and ensures smooth implementation of ideas. Performance in the Canadian vehicle is limited, but we have the conviction that the fund has all the attributes for success over the long term.
We’ll end with a look at one of the better Canadian-oriented balance funds around EdgePoint’s Canadian Growth and Income Portfolio. This one is a bit unorthodox compared to the other two. The strategy relies heavily on EdgePoint’s talents in stock selection and credit evaluation.
Andrew Pastore leads the charge on the former and has overseen great success both in this strategy and the stand-alone Canadian Equity Fund he manages, the fixed-income team. Here is no sludge, either. Most of EdgePoint’s history with fixed income has been tied to the balance funds, and credit analysts on the team can suggest stock ideas. It all makes for a highly differentiated yet very patient approach that has paid off. The F-share class has been one of the top performers in the Canadian equity balance category over the last three, five, 10, and 15 years ending January 2025.
For more, you can check out Morningstar’s 2025 Balanced Fund Landscape, which monitors the trends of assets and portfolios. For Morningstar, I’m Michael Dobson.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
