In assuming the lead manager role for the $954-million Dynamic Power Canadian Growth Fund<\/a> in early September, Alexander Lane has been focusing on improving its performance and providing investors with greater exposure to the United States.<\/p>\n
“We didn’t change things thematically, nor did we change the sector allocation. One big change was a strategic allocation to the U.S.” says Lane, adding that about 20% of the fund is in units of Dynamic Power American Growth<\/a> and another 27% in individual U.S. and international holdings.<\/p>\n
One representative holding is Catamaran Corp. (TSX:CCT<\/a>), which manages drug plans for governments and corporations. “The two drivers of their business are rising numbers of prescriptions as the population ages, and the amount of generic drugs that can be used to lower costs,” says Lane. “Catamaran uses its size to lower the cost of drugs \u2014 it’s a high-growth company”<\/p>\n
Today, Lane is responsible for about $2.4 billion in assets under management, including the three-star rated Dynamic Power Small Cap Fund<\/a>, which he has overseen for a decade. That fund has an annualized 9.1% return for the 10-year period ended Aug. 31, versus 3.6% for the median return in the Canadian focused small\/mid cap equity category. Effective Sept. 1, following a transition period, Lane also replaced Sehgal as the lead manager of Dynamic Power Balanced Fund<\/a>.<\/p>\n
One U.S. holding that he believes will benefit from rising optimism is the life insurer MetLife (NYSE:MET<\/a>). Based on his view that government bonds will have a tougher time, “the best way to play that trend is through life-insurance companies because they benefit as interest rates rise,” says Lane, adding life-insurance firms also benefit from rising equity markets because they invest their float in stocks.<\/p>\n