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Funds with foreign content spring to life in April

Latin America, Europe fuel advances

INVESTMENT REPORTER

Mutual funds that buy foreign stocks in sectors from banking in Brazil to cellphone makers in Europe saw gains in April as the swift end to conflict in Iraq provided a "Baghdad bounce" in financial markets.

Canadian and U.S. funds also enjoyed gains in April, although not so robust as those overseas.

Funds that invest in equities in Latin America saw the biggest gains, with an average advance of 14.7 per cent in April. That trims the group's average loss for one year to 22.4 per cent.

Stocks in Brazil surged last month as investors felt increasingly confident in the market-friendly policies of President Luis Ignacio Lula da Silva, who took over the country's leadership this year.

Among the top performers in the Latin American equity category, the StrategicNova Latin America Fund gained 16.8 per cent, the CIBC Latin American Fund jumped 15.3 per cent and the AGF Latin America Fund advanced 14.8 per cent.

European stock funds staged a strong 9.8-per-cent runup, on average, to lighten the funds' average loss for one year to 26.1 per cent.

Stocks in Europe also received a boost from the end of the war in Iraq and the euro continues to climb against the world's major currencies, says Paul Guest, international economist at Bank of Nova Scotia.

Favourable interest rate spreads and the realignment of portfolios from U.S. dollar to euro-denominated assets have helped the single currency's rise, he adds.

Among the top performing European stock funds in April, the Templeton European Tax Class Fund rose 13.4 per cent, the AGF European Equity Class Fund advanced 13.2 per cent, and the Talvest European Fund increased 12.7 per cent.

Science and Technology stocks were also back in favour with investors, with an average jump of 7.8 per cent. The average one-year slide for the category stands at 25.7 per cent.

The Nasdaq Stock Market climbed 9.2 per cent last month.

Top performing mutual funds included the Caldwell Technology Fund, which gained 14.6 per cent, the ING Global Communications Fund, which increased 12.4 per cent and the iUnits S&P/TSE Canadian Information Technology Index Fund, with a 12.3-per-cent gain.

U.S. equity funds rose an average of 5.2 per cent in April. The group's one-year loss now stands at 21.4 per cent, on average. Last month, the benchmark Standard & Poor's 500-stock index added 8.1 per cent.

Among U.S. equity funds, the Mavrix Enterprise Fund increased 12 per cent, the StrategicNova U.S. Large Cap Value Fund rose 10 per cent, and the O'Shaughnessy U.S. Growth Fund tacked on 9.8 per cent.

Canadian stock funds tallied more meager gains, with an average rise of 3.8 per cent. For one year, funds in the Canadian equity category have given up 14.7 per cent, on average.

The Toronto Stock Exchange S&P/TSX composite index also rose 3.8 per cent.

Top performers in the Canadian equity category included the Floyd Growth-Net Fund, which jumped 16.7 per cent, the Caldwell Canada Fund, which gained 9.7 per cent, and the Brandes Canadian Equity Fund with an increase of 8.3 per cent.

Large-capitalization equity funds in Canada rose 3.4 per cent last month for a one-year average loss of 15.7 per cent.

The Elliott & Page Generation Wave Fund added 6.3 per cent, the StrategicNova Canadian Large Cap Value Fund tacked on 6.1 per cent, and the O'Shaughnessy Canadian Equity Fund rose 5.9 per cent.

Canadian small-capitalization funds posted an average rise of 3.1 per cent to bring their one-year average shortfall to 15.1 per cent.

© 2007 The Globe and Mail. All rights reserved.

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