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Mutual Fund News

Latin funds lead pack despite Argentina

INVESTMENT REPORTER; Source: Globe HySales

Equity funds that invest in Latin America surged in December as Brazil and other countries in the region escaped the economic crisis that rocked Argentina.

Latin American stock funds rose an average of 9.7 per cent during December to outperform all other categories. The group's average loss for one year hit 5.3 per cent.

The benchmark Morgan Stanley Capital International Latin American index rallied 12.9 per cent in Canadian-dollar terms in December.

Among the big movers last month, the $8.1-million AIM Latin America Growth Class Fund rose 13.3 per cent, the $51.1.-million Investors Latin American Growth Fund gained 13.3 per cent, and the $6-million CIBC Latin American Fund added 12.6 per cent.

Other top advancers included the $6.1-million BMO Latin American Fund, up 12.2 per cent, the $31.1-million TD Latin American Growth Fund, which jumped 11.9 per cent, and the $5.2-million StrategicNova Latin America Fund, which added 11.5 per cent.

This year will mark a time of transition for Latin America, Bank of Nova Scotia economist Pablo Breard said recently in a research report. Mr. Breard said the global economic slowdown has unveiled the region's structural weaknesses.

Latin America's real gross domestic product will increase by a very modest 0.5 per cent this year, Mr. Breard forecasted.

With Argentina in structural recession, Venezuela impaired by weakening oil prices, Colombia in political and security distress and Chile vulnerable to volatile commodity markets, Brazil will dictate the near-term economic outlook of the region, he said.

In December, funds that invest in precious metals also gained ground, rising an average of 7.6 per cent. Over one year, the group gained a healthy 24.9 per cent.

Last month, the $60.6-million Mackenzie Universal Precious Metals Fund led the group with a 10.7 per cent return. Among other top performers, the $97.3-million Dynamic Canadian Precious Metals Fund jumped 8.4 per cent and the $134.6-million Royal Precious Metals Fund added 8.3 per cent.

Canadian equity funds rose an average of 3.8 per cent last month, bringing the category's average one-year gain to 4.2 per cent.

Strong performers included the $1.3-million Fallingbrook Growth Class A Fund, up 13.8 per cent, the $168.4-million ABC Fundamental Value Fund, which gained 10.2 per cent, and the $5.4-million Opus 2 Canadian Growth Fund, up 7.6 per cent.

Canadian large-cap equity funds rose an average of 3.4 per cent in December, for a one-year loss of 7 per cent.

Leading funds included the $416-million Maxxum Canadian Value Fund, which increased 5 per cent, the $93.4-million McLean Budden Canadian Equity Growth Fund, with a 4.5-per-cent advance, and the $5.2-million R Canadian Leaders Fund, which rose 4.5 per cent.

Canadian small-capitalization funds outperformed their larger counterparts for both the month and the year, with an average return of 6.6 per cent for December and an average gain of 1.9 per cent for the 12 months ended Dec. 31.

The $6.5-million Multiple Opportunities Fund led the category, with a 12.2-per-cent return. The $82.5-million National Bank Small Capitalization Fund climbed 9.9 per cent and the $50.4-million Beutel Goodman Small Cap Fund rose 9.8 per cent.

Emerging-markets funds also fared well in December. The category posted a return of 6.8 per cent for the month and a loss of 1.8 per cent for the year.

In December, the $39.9-million CIBC Emerging Economies Fund gained 10.2 per cent, the $12.6-million Altamira Global Discovery Fund added 10 per cent and the $42.2-million IG Scudder Emerging Markets Growth Fund increased 10 per cent.
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Best and worst performers
Funds with assets over $100-million, ranked by one-month returns to Dec. 31
Top 5 funds

                                                 One-    year-to-


                                      Assets     month       date


Fund                                  ($'000)    return    return


Dynamic QSSP                          $50,882    +14.6%    +13.4%


Investors Latin American Growth        51,070    +13.3      -3.6


Mackenzie Univ Precious Metals         60,611    +10.7     +44.4


AGF Latin America                      56,990    +10.7     -10.5


StrategicNova Canadian Technology     143,829    +10.5     -27.1

Bottom 5 funds

Fidelity Japanese Growth-A           $150,316     -7.3%    -29.8%


Triax Growth                          162,410     -5.5     -43.9


AGF Japan Class                        91,135     -5.4     -27.9


Royal Japanese Stock                   63,682     -4.7     -30.0


CI Pacific                            159,952     -4.7     -22.2

© 2007 The Globe and Mail. All rights reserved.

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