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Mutual Fund News

Precious metals gleam

Funds soar as investors seek safety


Equity funds that invest in precious metals topped the charts in March as the price of gold soared.

Precious-metals funds jumped an average of 8.3 per cent to bring their average one-year gain to an eye-popping 69.8 per cent.

During the month, gold broke through the psychologically important level of $300 (U.S.) an ounce.

The Toronto Stock Exchange gold and precious minerals index jumped 3.7 per cent in March.

Precious-metals funds also surged in January and February as global turbulence -- including U.S. economic woes, war in Afghanistan and turmoil in the financial systems of Argentina and Japan -- sent investors to safe havens.

In Japan last month, people were buying gold leading up to April 1, when new regulations that limit the insurance coverage on bank deposits came into effect.

Among top performers in the precious-metals category last month, the $28.7-million (Canadian) Sprott Gold and Precious Metals Fund surged 13.2 per cent, the $500,000 Cambridge Precious Metals (Sagit) Fund jumped 13.2 per cent and the $212.6-million Royal Precious Metals Fund gained 12.4 per cent.

The $128.4-million Dynamic Precious Metals Fund advanced 10.6 per cent and the $34.9-million BMO Precious Metals Fund rose 10.2 per cent.

John Embry, portfolio manager of the Royal fund, said gold's ability to push through $300 (U.S.) was important because that level represents the psychological divide between the bulls and the bears.

"The macroeconomic backdrop for gold is as good as it has ever been in 20 years," he said.

Mr. Embry said many investors who have not had significant holdings in gold in recent years now feel the need to gain some exposure to the traditional safe haven. As a result, too much money ends up chasing too few stocks, pushing share prices higher.

Funds that invest in natural resources also benefited from rising gold and oil prices in March.

The $1.1-million (Canadian) Cambridge Resource (Sagit) Fund advanced 11.8 per cent, the $25.9-million EnerVest Natural Resources Fund Ltd. rose 9.5 per cent and the $10.4-million Sentry Canadian Energy Growth Fund rose 9.4 per cent.

Science and technology funds rallied last month along with the market's hopes for an improving U.S. economy, with an average gain of 6.7 per cent. That helped trim the group's average loss for one year to 16.6 per cent.

The $30.5-million AIC Global Science and Technology Fund soared 16.7 per cent, the $11.9-million AIC Global Developing Technologies Fund climbed 14.9 per cent and the $9.8-million BMO Global Technology Fund gained 12 per cent.

Many funds with holdings in emerging and international markets also saw healthy gains.

The Japanese equity group posted an average return of 6.8 per cent last month to bring the one-year average loss for the category to 19.6 per cent.

The $500,000 GGOF Centurion Japanese Value Fund rose 8.3 per cent, the $157.5-million Fidelity Japanese Growth-A Fund gained 7.9 per cent and the $21.2-million TD Japanese Index Fund rose 7.7 per cent.

The Asia ex-Japan category posted an average return of 5.1 per cent last month, lifting the one-year performance to 8.5 per cent.

The $32.9-million National Bank Asia Pacific Fund jumped 6.9 per cent, the $77.8-million TD Asian Growth Fund increased 6.4 per cent and the $557.3-million Fidelity Far East-A Fund rose 6.4 per cent.

Canadian equity funds, meanwhile, managed an average 3.4-per-cent rise in March. The group's one-year return now stands at 6.4 per cent.

Among the better performers last month, the $1.2-million Hirsch Performance Fund advanced 10.5 per cent, the $75.9-million Synergy Extreme Canadian Equity Fund gained 8.3 per cent, and the $1.2-million Fallingbrook Growth Class A Fund rose 8.1 per cent.

Among the worst performers, the $800,000 University Avenue Canadian Fund lost 4 per cent, the $170.1-million Acuity Clean Environment Equity Fund slipped 0.2 per cent and the $62.7-million AIC Canadian Focused Fund edged down 0.2 per cent.

Canadian large-cap equity funds edged up an average 3.3 per cent. The average one-year gain for the group was 3.6 per cent.

The $1148.6-million Dynamic Power Canadian Growth Fund was up 7.8 per cent, the $1.7-million FMOQ Canadian Equity Fund rose 6.6 per cent, and the $900,000 Mavrix Sustainable Development Fund gained 6.6 per cent.

Canadian small-cap funds fared better than those investing in large caps. The category gained an average 4.9 per cent in March to raise the average return for one year to a hefty 16 per cent.

The $43.9-million Resolute Growth (Thomson Kernaghan) Fund jumped 12.2 per cent, the $167.3-million Sprott Canadian Equity Fund rose 11 per cent and the $29.2-million Synergy Canadian Small Cap Class Fund increased 8 per cent.

Among the specialty categories, funds that invest in financial services posted an average gain of 5.1 per cent, bringing the average one-year return to 3.7 per cent.

Best and worst performers

Top 10 funds

                                             One-      One-

                                   Assets    month     year

Fund                              ($'000)    return   return

Royal Precious Metals             $212,578    12.4%   104.5%

Trimark Europlus                   156,127    11.5      7.7

Trimark RSP Europlus                79,341    11.3      6.3

Sprott Canadian Equity             167,345    11.0     82.1

Dynamic Canadian Precious Metals   128,408    10.6     94.1

AIM Global Technology              262,082    10.0    -15.7

AIM RSP Global Technology          146,920     9.9    -16.0

Altamira Science & Technology      337,969     9.9    -21.7

Altamira RSP Science & Technology   73,988     9.8    -22.0

Trimark Discovery                  486,779     9.7     -5.6

Bottom 10 funds

Capital Alliance Ventures          $72,090    -7.8%    -7.4

First Ontario LSIF Ltd.             52,003    -3.8     -9.9

Covington Fund I                   138,252    -3.2    -19.3

IUnits GOC 10 Year Bond             73,245    -2.7      2.8

Altamira Bond                      395,239    -2.5      2.4

AGF Canadian Bond                  793,000    -2.3      1.5

Clarica Income                      86,659    -2.2      2.5

Mackenzie Univ Wld Tactical Bond    71,343    -2.2     -1.0

IUnits GOC 5 Year Bond              92,382    -2.2      4.4

Beutel Goodman Income               77,059    -2.2      4.3

© 2007 The Globe and Mail. All rights reserved.

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