The YCG Enhanced Fund (YCGEX), a relative newcomer to the actively managed equity mutual funds universe (having been launched at the end of 2012), has drawn attention for its options-enhanced value strategy. In addition, its performance in 2017, 2018, and 2019 has been admirable. And despite a couple of under-performing calendar years, its long-term trailing returns stack up well compared to its Morningstar large blend category peers.
YCG Enhanced Fund portfolio manager (and founder of YCG, LLC) is Brian Yacktman. He is the son of legendary value stock investor Don Yacktman, who founded Yacktman Asset Management. Initially, Brian was an associate with Yacktman Asset Management. Brian founded Yacktman Capital Group in 2007, later renamed YCG, and opened this fund about five years later. Brian differentiated his investment style from Yacktman Asset Management using what he calls “option enhancement.”
He further explained that as “using options as a way to get exposure to businesses. It’s a strategic way to indirectly access a security when we believe that doing so through the option provides a better risk-adjusted return than owning a stock outright.” The investment process at YCG is grounded in value fundamentals. Brian and co-portfolio manager, Elliott Savage, look at equities of any market capitalization that they believe will produce high, risk-adjusted, forward rates of return. They use a bottom-up approach focused on individual companies, and construct a portfolio they expect to excel across economic cycles, with an investment horizon that looks out a decade or more.
All index and financial terms, definitions, and acronyms can be found on our Glossary page.
Fund holdings and sector allocations are subject to change at any time and should not be considered a recommendation to buy or sell any security. Click here for current Top Ten holdings.
Earnings Growth is not a measure of the Fund’s future performance.
References to other funds should not be interpreted as an offer of these securities.
The Morningstar Rating™ for funds, or “star rating”, is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history, without adjustment for sales loads. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating™ for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating™ metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods. The YCGEX Fund was rated against the following numbers of Large Blend Funds over the following time periods as of 03/31/2020: 1214 funds overall, 1127 funds in the last three years, and 982 funds in the last five years. With respect to these Large Blend Funds, YCGEX Fund received a Morningstar Rating of 5 stars, 5 stars and 5 stars for the overall, three-, and five- year periods, respectively.
© 2020 Morningstar, Inc. All Rights Reserved. The information contained herein (1) is proprietary to Morningstar (2) may not be copied or distributed and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any issue of this information. Past performance does not guarantee future results.
Morningstar ranked YCGEX in the top 10%, 3% and 3% out of 1229, 1127 and 982 for the Large Cap Blend Category for the one-, three- and five-year periods ending 03/31/2020, respectively. Morningstar Rankings represent a fund’s total-return percentile rank relative to all funds that have the same Morningstar Category. The highest percentile rank is 1 and the lowest is 100. It is based on Morningstar total return, which includes both income and capital gains or losses and is not adjusted for sales charges or redemption fees.
Credit ratings are grades given to bonds that indicate their credit quality as determined by a private independent rating service such as Standard & Poor’s. The firm evaluates a bond issuer’s financial strength, or its ability to pay a bond’s principal and interest in a timely fashion. Ratings are expressed as letters ranging from ‘AAA’, which is the highest grade, to ‘D’, which is the lowest grade. In limited situations when the rating agency has not issued a formal rating, the rating agency will classify the security as nonrated.
For standardized performance, current expense ratios, and Morningstar ratings, please click here. Performance data quoted represents past performance and does not guarantee future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month end may be obtained by calling 1-855-444-9243. Investment returns and principal value will fluctuate, and when sold, may be worth more or less than their original cost.
Performance of YCG Enhanced Fund versus S&P 500 and Morningstar Large Cap Blend Category Peer Group as of 03/31/2020:
1- Year 3-Year 5-Year Since Inception
YCG Enhanced Fund (YCGEX) -4.89% 7.13% 7.44% 10.41%
S&P 500 TR Index -6.98% 5.10% 6.73% 11.05%
Morningstar Large Cap Blend Category -10.03% 2.67% 4.36% —
Russell 1000 Index -8.03% 4.64% 6.22% —
Returns for YCGEX are net of fees.
Since Inception date is 12/28/2012.