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Mutual Fund News

Science, tech funds suffer

INVESTMENT REPORTER; Source: Globe HySales

Mutual funds that invest in science and technology stocks plunged in June, as slumping sales and weak profits signalled that the ailing sector's extended slump is not over.

Corporate scandals at WorldCom Inc. and Xerox Corp. -- along with the insolvency of Adelphia Communications Inc. -- also caused more investors to flee the risks associated with tech and telecom.

Science and tech funds dropped an average of 13.3 per cent in June, bringing their average one-year loss to 43.7 per cent.

Among the top performers, the $700,000 RBC Advisor Global Infrastructure Class dipped 1.7 per cent, the $1.9-million Northwest Specialty Innovations declined 3.3 per cent and the $200,000 Middlefield Global Technology Class slipped 5.2 per cent.

At the bottom of the group, the $600,000 Sentry Wireless Communications dropped 25.3 per cent, the $3.2-million ING Global Communications fell 24.9 per cent and the $29.2-million iUnits S&P/TSE Canadian Information Technology Index Fund fell 21.6 per cent.

Robert McWhirter, a vice-president at Triax Investment Management and portfolio manager for the Northwest fund, said June was "ugly, very ugly" for tech and telecom.

The portfolio manager said investors seemed unnerved by a prediction from one market analyst that more of the downward revisions in earnings estimates would come from tech companies than from companies in other sectors.

Mr. McWhirter said unit sales estimates for personal computers also came down, and warnings of weaker sales from high-profile companies such as Advanced Micro Devices Inc. and Apple Computer Inc. also unsettled the market.

"There weren't any kind of rays of sunshine," Mr. McWhirter said.

He attributed his fund's ability to outperform many others to holding a large cash cushion and seeking out growth in earnings at a reasonable stock price.

Precious-metals funds also suffered a major pullback in June after leading all other categories for several months straight.

The group lost an average of 10.3 per cent last month, to trim their average one-year gain to 71.1 per cent.

The 44.8-million CIBC Precious Metals Fund dropped 6 per cent, the $600,000 Cambridge Precious Metals (Sagit) Fund fell 6.9 per cent, and the $3.2-million MAXXUM Precious Metals tumbled 9.7 per cent.

Canadian large-cap equity funds lost an average of 6.1 per cent in one month and over one year.

Among the better performers last month, the $2.1-million RBC Advisor Blue Chip Canadian Equity slipped 3.2 per cent, the $703.1-million Spectrum Canadian Investment fell 3.7 per cent and the $46.5-million Royal Canadian Value dropped 4 per cent.

Canadian equity funds posted an average loss of 5.5 per cent in June and 4.2 per cent over one year.

The $700,000 Trans-Canada Value (Sagit) gained 6.5 per cent, the $900,000 imaxx Canadian Equity Growth was flat, and the $6.6-million Mackenzie Sentinel Canada Equity lost 0.1 per cent.

Equity funds that invest in Latin America also posted big losses in June. The group lost an average of 13.2 per cent, to bring their average loss for one year to 20.2 per cent.

BEST AND WORST PERFORMERS
Assets over $50-million, ranked by one-month returns to June 30
Top 10 funds

                                       Assets     One-month     One-year


Fund                                   ($'000)       return        returnMackenzie Univ Wld Tactical Bond       $73,224      +4.4%        +14.0%

CIBC Global Bond Index.................194,933......+4.2.........+13.5

SEI Enhanced Global Bond-O..............63,161......+4.2.........+14.4

Optima RSP Global Fixed Income Pool....102,352......+4.1.........+13.0

Optima Global Fixed Income Pool........375,783......+4.1.........+13.2

TD Global RSP Bond.....................553,617......+4.1.........+13.2

Clarica Global Bond.....................59,453......+3.8.........+12.2

Dynamic Focus Plus Divers Inc. Trust...438,044......+3.8.........+27.0

Investors Global Bond..................137,345......+3.6.........+16.5

Renaissance Canadian Income Trust......584,399......+3.5.........+19.1

Bottom 10 funds

CIBC Global Technology                $112,107     -19.2%       -52.5%

Talvest Global Sci & Tech..............124,132.....-19.1........-52.0

Sprott Gold and Precious Metals.........75,104.....-16.3..........-

CI Global Telecommunications Sect......256,206.....-16.3........-48.5

CI Global Biotechnology Sector.........337,030.....-16.3........-47.6

CI Global Biotechnology RSP.............79,066.....-16.2........-47.5

CI Global Telecommunications RSP.......103,540.....-15.9........-48.1

TD Entertainment & Communications......146,998.....-15.5........-37.3

CI Global Technology RSP................66,860.....-15.4........-39.6

CI Global Technology Sector............163,592.....-15.3........-39.5

© 2007 The Globe and Mail. All rights reserved.

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