Topic: How To Invest

Dear Pat: What do you think of the Renaissance Optimal Income Portfolio Fund? Thank you.

Article Excerpt

The Renaissance Optimal Income Portfolio Fund seeks to generate income, mainly by investing in units of the mutual fund company’s Canadian and global funds. The $2.9-billion fund has a 1.92% MER (which reflects the MERs the individual funds charge). It yields 4.0%. The fund has the following holdings: Renaissance Canadian Bond, 30.1%; Renaissance Canadian Dividend, 24.7%; Renaissance Global Infrastructure, 14.9%; Renaissance Global Bond, 10.1%; Renaissance High-Yield Bond, 9.9%; Renaissance Floating Rate Income, 5.1%; and Renaissance Real Return Bond, 4.9%. The managers of the individual funds include Ares Management, headquartered in Los Angeles; Brandywine Global, based in Philadelphia and a subsidiary of Legg Mason; CIBC Asset Management; and Sydney, Australia-based RARE Infrastructure Ltd. The fund holds 60.1% of its portfolio in bond funds. Bonds are unlikely to perform well over the next few years, if only because interest rates will likely hold steady or rise. That means the fund would only earn interest income on its bonds; instead of capital gains, its bond holdings…

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