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Mutual Fund News

Precious metals keep on shining

INVESTMENT REPORTER; SOURCE: GLOBE HYSALES

Equity funds that invest in precious metals extended their winning streak in April as the price of gold continued to rise.

Precious-metals funds gained an average 7.3 per cent, bringing their one-year gain to 64.3 per cent.

During the month, the price of gold surpassed $310 (U.S.) an ounce for the first time in more than two years. The Toronto Stock Exchange (TSX) gold and precious minerals index gained 5 per cent.

Unsettled investors have sought a safe haven for financial assets. Political turmoil in the Middle East, concern about Japan's banking system, turbulent global stock markets, a weakening U.S. dollar and the actions of speculators all contributed to gold's rise.

Historically, the metal's performance has strengthened as other asset classes crumble.

Among the category's strong performers last month, the $42.1-million (Canadian) Sprott Gold and Precious Metals Fund soared 13.4 per cent, the $236.4-million Royal Precious Metals Fund jumped 12.1 per cent and the $101.1-million Mackenzie Universal Precious Metals Fund gained 10 per cent.

Other top performers included the $6.3-million StrategicNova World Precious Metals Fund, up 10 per cent, the $36.5-million Altamira Precious & Strategic Metal Fund, which gained 9.2 per cent, and the $2.6-million Maxxum Precious Metals Fund, up 9 per cent.

Frederick Sturm, portfolio manager of the Mackenzie Universal and Maxxum funds, said a deficit in the supply of gold following consolidation in the industry could push the price higher still. He believes the price of bullion could reach $350 (U.S.) an ounce.

Mr. Sturm, who also has holdings in platinum, silver, and diamonds, believes many gold stocks are fully valued. Shares of gold producers tend to run ahead of the metal's price.

Mr. Sturm also said he thinks that, as the price of gold approaches $350, some of the smaller producers may see their stocks fall as investors take profits. But the senior gold producers' stocks will hold up better in any sector pullback, he said.

While gold was gaining in April, investments at the other end of the risk spectrum -- technology stocks -- were sliding.

Funds in the science and technology category were the biggest losers for the month, with an average decline of 12.7 per cent. The group's one-year loss now stands at 36.9 per cent.

During April, investors in tech and telecom were rattled by bad news from such bellwether names as Nortel Networks Corp., WorldCom Inc. and Celestica Inc.

Among science and technology funds, top performers in April included the $2-million (Canadian) Northwest Specialty Innovations Fund, which slipped 1.2 per cent, the $2.2-million RBC Advisor Global Infrastructure Class Fund, with a 2.7-per-cent loss, and the $200,000 Middlefield Global Technology Class Fund, which fell 7.5 per cent.

Among the worst performers in the category last month, the $76-million Investors Global e.Commerce Fund tumbled 22.7 per cent, the $31.4-million iUnits S&P/TSE Canadian Information Technology index fund fell 19.8 per cent, and the $6.6-million First Trust N.A. Technology 99 Fund dropped 18.5 per cent.

Canadian large-cap equity funds also lost ground in April, with an average decline of 2.4 per cent. The average one-year loss for the group is 2.2 per cent.

The $334.9-million O'Shaughnessy Canadian Equity Fund rose 1.7 per cent, the $6.8-million Dynamic Power Canadian Growth Class Fund edged up 0.61 per cent, and the $38-million Mawer Canadian Equity Fund rose 0.5 per cent.

Canadian equity funds also slipped 2.1 per cent in April, lowering their average gain for one year to a flat 0.1 per cent.

The $215.9-million ABC Fundamental Value Fund advanced 2.3 per cent, the $5.9-million Acuity All Cap 30 Canadian Equity Fund gained 1.5 per cent and the $312-million Mackenzie Cundill Canadian Security C Fund rose 1.5 per cent.

U.S. equity funds tumbled in April along with the broader market in the United States.

The average decline for the category was 6.3 per cent, to drag the one-year loss for the group down to 13.5 per cent.

The $95.1-million O'Shaughnessy U.S. Growth Fund jumped 6.5 per cent, the $29.8-million ABC American-Value Fund gained 5 per cent, and the $144.7-million BPI American Opportunities Fund posted a return of 1.1 per cent.

Funds that invest in health-care stocks also slid further into negative territory in April, with an average drop of 7 per cent. For one year, the group's loss was 11.7 per cent.

Last month, the $28.2-million BMO Global Health Sciences Class Fund slipped 0.1 per cent, the $31.2-million R Life & Health Fund dropped 1.6 per cent, and the $919.2-million Talvest Global Health Care Fund fell 2.8 per cent.

Japanese equity funds saw their fortunes improve in April, with an average gain of 2.8 per cent. trimming their average loss for one year to 22 per cent.

The $3.3-million Mackenzie Universal Select Managers Capital Class Fund jumped 5.1 per cent, the $29.4-million Altamira Japanese Opportunity Fund rose 3.8 per cent, and the $30.7-million TD Japanese Growth Fund climbed 3.7 per cent.

European equity funds dropped an average 2.3 per cent last month to bring their average one-year loss to 11.8 per cent. The $172.5-million Trimark Europlus Fund rose 4.9 per cent, the $234-million Investors Euro Mid-Cap Growth Fund gained 3.7 per cent, and the $34.4-million Mackenzie Universal European Opportunities Capital Class Fund rose 2 per cent.

Best and worst performers

Assets over $50-million, ranked by one-month returns to April 30

Top 10 funds

................................................One-......One-

....................................Assets......month.....year

Fund................................($'000).....return....return

Royal Precious Metals...............$236,406.....12.1%....110.8%

Sprott Hedge L.P.....................271,203.....11.4......98.8

Mackenzie Univ Precious Metals.......101,133.....10.0......89.0

AGF Precious Metal....................53,403......8.6......76.4

O'Shaughnessy U.S. Growth.............95,123......6.5......13.2

Bissett Microcap-F....................55,462......6.3......48.5

Dynamic Canadian Precious Metals.....135,900......6.1......79.5

Bissett Small Cap-F..................123,603......5.9......24.8

TD Precious Metals....................97,125......5.2......65.3

Northwest Specialty Equity............70,572......5.1......30.7

Top 10 funds

................................................One-......One-

....................................Assets......month.....year

Fund................................($'000).....return....return

Investors Global e.Commerce..........$76,027....-22.7%....-43.1%

Investors Global Sci & Tech..........695,750....-17.8.....-39.2

Altamira RSP Science & Technology.....61,409....-15.9.....-44.0

Altamira Science & Technology........279,773....-15.7.....-43.8

CI Glo Business-to-Business Sec.......53,991....-15.6.....-43.9

CI Global Biotechnology Sector.......476,421....-15.5.....-24.7

CI Global Biotechnology RSP..........110,602....-15.5.....-24.6

TD Science & Technology..............297,881....-14.9.....-42.3

TD Science & Technology RSP...........72,624....-14.6.....-41.9

AIM RSP Global Technology............123,867....-14.6.....-41.2

© 2007 The Globe and Mail. All rights reserved.

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