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Science and tech funds hardest hit


Equity funds that invest in global science and technology stocks plunged again in February as corporate America's accounting scandals and profit warnings unsettled markets.

The category was the hardest hit of all, as the technology-heavy Nasdaq-100 index dropped 13 per cent during the month.

Science and tech funds tumbled an average of 11.3 per cent to bring their average loss for the year ended Feb. 28 to 32.6 per cent.

Among the top-performing funds in the category, the $2.2-million RBC Advisor Global Infrastructure Class edged up 2.9 per cent, the $2.1-million Northwest Specialty Innovations slipped less than 1 per cent, and the $18.3-million Tera Capital Venture dropped 1.5 per cent.

Among the worst performers in the group, the $4.8-million ING Global Communications tumbled 22 per cent, the $7.3-million Mackenzie Universal Internet Technology Fund dropped 19.1 per cent and the $225.2-million AIM Global Telecommunications Class plummetted 18.3 per cent.

Robert McWhirter, portfolio manager of the Northwest Specialty Innovations Fund, said investing in technology was "really ugly" during February.

Mr. McWhirter said he studies a number of factors, including a company's earnings growth, earnings momementum and price-to-earnings ratio, in picking stocks for his portfolio.

In February, that analysis led him to avoid the networking and optical sectors in favour of such areas as security software and medical and environmental technology.

Technology stocks, which had rallied in the last months of 2001, were hammered again in the early weeks of 2002 as investors decided to pull out.

But while investors were selling technology, they were bidding up gold and precious metals stocks in February.

Funds that invest in precious metals jumped an average 11.2 per cent last month to bring their average gain for one year to a whopping 50.5 per cent.

Leading the advance, the $21.6-million Sprott Gold and Precious Metals Fund soared 17.5 per cent, the $189.9-million Royal Precious Metals Fund rose 16.2 per cent and the $41.7-million AGF Precious Metal Fund increased 14.3 per cent.

Canadian equity funds were flat in February, with an average gain of less than 1 per cent.

The group's return for one year now stands at 5.7 per cent.

The $12.8-million Chou RRSP Fund jumped 7.3 per cent, the $235.9-million Mackenzie Growth Fund rose 6.4 per cent and the $4-million Juniper Equity Growth Fund added 5 per cent.

Among the month's worst performers, the $1.1-million Fallingbrook Growth Class A fell 11 per cent, the $70.9-million Synergy Extreme Canadian Equity Fund slipped 7.6 per cent and the $2.2-million Caldwell Canadian Fund dropped 5.4 per cent.

Canadian large-cap equity funds also languished in February, with an average gain of less than 1 per cent.

The average one-year loss for the category is now 3.5 per cent.

The $599.3-million Spectrum Canadian Investment Fund rose 3.1 per cent, the $272.9-million Renaissance Canadian Core Value Fund posted a 2.9-per-cent return, and the $7.1-million QSA Canadian Equity (Series A) Fund rose 2.9 per cent.

Funds that invest in natural resources fared well last month, with an average 7.6-per-cent advance.

The category now boasts an average one-year gain of 10.4 per cent.

In February, stocks rose along with the prices of many underlying commodities, including gold, oil, natural gas and lumber.

Investors also appeared to be buying natural-resource stocks in anticipation of economic recovery and a potential rebound in manufacturing.

The $22.7-million Dominion Equity Resource Fund surged 12.9 per cent, the $6.1-million Northwest Specialty Resource Fund rose 11.7 per cent and the $7.1-million StrategicNova Canadian Natural Resource Fund jumped 11.3 per cent.
Best and worst performers
Assets over $50-million, ranked by one-month returns to Feb. 28
Top 10 funds

                                    Assets      One-month  One-year

Fund                                ($'000)     return     returnRoyal Precious Metals               $189,936    +16.2%     +78.6%

Mackenzie Univ Precious Metals        80,497    +13.4      +72.8

Sprott Hedge L.P                     199,017    +13.4      +73.4

Fidelity Japanese Growth-A           147,696    +11.2      -24.9

Dynamic Canadian Precious Metals     117,359    +11.2      +72.1

London Life Natural Res (MX)          61,437    +10.6      +25.2

TD Precious Metals                    85,563    +10.4      +52.8

Mackenzie Univ Canadian Resource     164,766     +9.7      +29.3

Sprott Canadian Equity               125,834     +9.6      +57.7

Royal Energy                         221,320     +9.0      +12.2

Bottom 10 funds

AIM Globeal Telecommun. Class       $225,225    -18.3%     -55.9%

CIBC Global Technology               170,283    -14.1      -43.5

Talvest Global Sci & Tech            191,131    -13.7      -42.8

Altamira RSP Science & Technology     66,944    -15.6      -42.3

Altamira Science & Technology        307,263    -15.5      -42.2

CI Glo Business-to-Business Sec       61,886    -11.0      -38.4

AIM RSP Global Technology            133,918    -14.7      -37.4

AIM Global Technology                238,433    -14.8      -37.2

TD Science & Technology              320,899    -11.7      -33.2

TD Science & Technology RSP           77,084    -11.5      -32.8

© 2007 The Globe and Mail. All rights reserved.

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