Exam CIFC Topic 1 Question 62 Discussion

Actual exam question for IFSE Institute's CIFC exam
Question #: 62
Topic #: 1

Loretta is looking for a well diversified equity fund. Her ideal mutual fund would hold investments within and outside Canada. Although she is seeking growth, Loretta also wants a mutual fund that invests in quality companies.
Which of the following mutual funds would be the best choice for Loretta?

A. Dominion International Growth Fund - this international equity fund invests in small and medium sized companies in countries all around the world. B. Polar Global Blue Chip Equity Fund - this global equity fund invests in large, established companies in mostly stable and mature foreign markets. C. Lennox Energy Fund - this sector fund invests primarily in Canadian oil and gas companies that sell both to domestic and foreign markets. D. Auric Precious Metals Fund - this sector fund invests in Canadian companies that participate in the precious metals sector such as owning mines in foreign countries.

Suggested Answer: B Vote an answer

Explanation
Loretta is looking for a well diversified equity fund that invests both within and outside Canada. She also wants a fund that invests in quality companies, which implies that she prefers lower risk and higher stability. A global equity fund would meet her criteria, as it can invest in any country, including Canada, and diversify across different regions and markets. A global equity fund that focuses on large, established companies, also known as blue chip stocks, would also suit her preference for quality and stability, as these companies tend to have strong financial performance, competitive advantages, and consistent dividends. Therefore, the Polar Global Blue Chip Equity Fund would be the best choice for Loretta among the given options.
References: Canadian Investment Funds Course, Unit 6, Section 6.2

by Matthew at Nov 18, 2023, 12:33 PM

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