Key Morningstar Metrics for Manulife Fundamental Equity Fund (MPIP 75/75)
- : GoldMorningstar Medalist Rating
- : Above AverageProcess Pillar
- : Above AveragePeople Pillar
- : Above AverageParent Pillar
A clear definition of quality and valuation tethers the fast-moving Manulife Fundamental Equity strategy.
Lead manager Patrick Blais and the rest of the eight-member team view companies through two lenses, all tied to cash. They look for quality companies (those that can consistently reinvest cash at high rates of return) at reasonable prices (attractive forward 12-month free cash flow yields). A target sheet of roughly 250 companies is the main source for ideas, and the team will quickly move to trim and add to positions in line with its preferred valuation and quality metrics.
A time-intensive financial restatement process distinguishes the approach. A screen using third-party estimates can surface new ideas for the target sheet. An analyst then conducts a data quality check before restating 10 years of financials to isolate recurring cash returns and costs—a labor-intensive step that underpins the team’s view of a company’s true earning power. This produces a deeper understanding of a company’s business moat and feeds into a discounted cash flow analysis to test sensitivity to different factors. For example, the team questions the durability of gold miners’ cash flows and, through April 2026, held no such exposure. While quantitative measures tether this strategy, the team still has plenty of discretion.
An experienced team has the expertise suited to this accounting-based approach. Blais has led this strategy since 2018 and was a part of the team’s founding more than a decade ago. He also trained as an actuary prior to his career in investment management. Derek Chan possesses an accounting background and designation. Five of the eight members have more than a decade of investment management experience.
Blais has encouraged a flat decision-making structure. The team meets weekly to go over the portfolio and suggest changes. If a majority cannot be easily reached, it goes to a blind vote. Blais does have the power to overrule any decision, though he has not used it yet.
The past 20 months have been a rare extended stumble in an otherwise successful history. From September 2024 through April 2026, the Manulife Fundamental Equity F share class returned a cumulative 15.4%, which placed behind 90% of Canadian focused equity Morningstar Category peers. This has dented, but not erased, its long-term success on an absolute and risk-adjusted basis. Over the last 10 years ending April 2026, the fund’s 12.4% annualized return was in the top quartile while its volatility (as measured by standard deviation) was in the bottom quartile.
Manulife Fundamental Equity Fund (MPIP 75/75): Performance Highlights
While short-term results have been poor, Manulife Fundamental Equity retains a strong long-term record.
Over the past 10-year period, most of which Patrick Blais has led the team, the Manulife Fundamental Equity F share class’ 12.4% annualized return ranked ahead of more than 80% of its Canadian focused equity category peers, though that was also 0.9 percentage points less than the Morningstar DM Canada 65/35 Index. A long-term overweighting in US stocks contributed to the outperformance. At the same time, this strategy has been one of the least risky in the category, with an annualized standard deviation that was less than 80% of category peers.
This all came despite a poor stretch of performance dating back to September 2024. From then through April 2026, the fund returned 15.4%, which was 30 percentage points less than the category index and behind 90% of category peers. A confluence of factors hurt: The strategy was underweight in Canada relative to most peers; it favored healthcare stocks and property-casualty insurers while avoiding soaring gold miners; and a quality tilt was penalized as commodity-driven and lower-quality segments of the Canadian market led. None of these exposures are surprises given the strategy’s process—they are direct outputs of its cash flow and quality screens.
The fund still possesses a strong defensive track record. It has captured less than 100% of the index’s losses over three-, five-, and 10-year periods ending April 2026. It outperformed the category index in all but two downturns (defined as drops of10% or more) of that target going back to 2011. This included the period from Feb. 1, 2025, through April 8, 2025, when the fund’s 11.6% loss was narrower than the index’s 14.0% fall.
