Equity funds that invest in science and technology took the lead in performance among fund categories in January as Nortel Networks Corp. skyrocketed 89 per cent and many smaller Canadian tech players powered ahead of the big U.S. names.
Science and tech funds jumped an average of 6.9 per cent last month to bring their average one-year gain to 38.7 per cent, according to monthly data compiled by globefund.com.
Among top-performing funds, the $101.5-million iUnits S&P/TSX Capped IT index fund surged 34 per cent, the Tera Capital Global Technology fund advanced 22.6 per cent, and the $10.7-million ING Global Communications fund gained 20.6 per cent.
The $114.1-million Dynamic Canadian Technology fund increased 18.3 per cent, the $599,000 Acuity Clean Environment Sci & Tech fund rose 14.9 per cent, and the $12.9-million Northwest Specialty Innovations fund jumped 14 per cent.
Duncan Stewart, portfolio manager of the Dynamic Canadian fund, said Canadian tech stocks had been due to outperform their U.S. cousins. 'U.S. tech stocks had run enormously.'
Mr. Stewart noted that, in December, shares of profitable Canadian tech firms were trading at about 19 times earnings-per-share, while their U.S. counterparts had reached a richer 35 times earnings.
He adds that small-capitalization names had an extra boost from the so-called 'January effect.'
That phenomenon often occurs because money managers tend to sell their losing issues - particularly the small caps - in December. Those stocks, which are usually more illiquid than the large caps, can then rise sharply in January as buyers step back in.
Nortel Networks soared in January as a deal with Verizon Communications Inc., good financial results from other networking companies and Nortel's own fourth-quarter numbers fuelled investor enthusiasm. In January, the technology-rich Nasdaq composite index added 3.1 per cent.
Canadian equity funds edged up an average of 2.4 per cent in January. The group's gain for the 12 months to Jan. 31 now stands at 25.5 per cent.
In Toronto, the S&P/TSX composite index rose 3.6 per cent.
Last month, the $5.2-million Mavrix Growth fund jumped 14 per cent, the $40.2-million Elliott & Page Generation Wave fund rose 12.5 per cent and the $40.5-million Acuity All Cap 30 Canadian Equity fund gained 8.4 per cent.
The Canadian small-capitalization group slightly outpaced the large-cap universe with an average advance of 3.4 per cent. For one year, the group has gained an average of 38.3 per cent.
The $44.3-million CIBC Canadian Emerging Company fund gained 10.1 per cent, the $14.2-million Hillsdale Canadian Performance Equity fund rose 7 per cent, and the $36.7-million Synergy Canadian Small Cap Class fund increased 6.9 per cent.
The Dow Jones industrial average of 30 blue-chip stocks stayed almost flat with a 0.3-per-cent increase. Funds that invest in U.S. equities rose an average of 3.4 per cent, for a one-year average advance of 18 per cent.
The $937,000 Mavrix Enterprise fund gained 11.2 per cent, the $1.5-million Mavrix American Growth fund increased 7.8 per cent, and the $11.1-million Mackenzie Select Managers USA Cap-B fund rose 7.6 per cent.
International equity funds rose 4.2 per cent, on average, last month, to bring their average one-year jump to 26.9 per cent.
Last month, the $53.8-million CIBC International Small Co. fund added 9.2 per cent, the DFA International Small Class F fund rose 7.2 per cent, and the $37.8-million Trimark International Companies-A fund gained 7.1 per cent.
Precious metals equity funds cooled off in January after a red-hot performance in 2003. The group's average loss in January was 6.5 per cent, to trim their one-year average advance to 29.2 per cent.
Among top performers, the $17.7-million Millennium BullionFund edged up 4 per cent, the $1.9-million FCMI Precious Metals Fund Inc. added 2.4 per cent, and the $34.8-million Mackenzie Universal World Precious Metal Capital fund dipped 4.5 per cent.
Returns as of Jan. 31, 2004
Returns Fund 1-mth. 1-yr. Alternative strategies 1.0% 15.4% Asia ex-Japan equity 5.9 32.6 Asian/Pacific Rim eq. 4.6 29.3 Canadian balanced 2.0 15.6 Canadian bond 1.2 7.6 Canadian dividend 1.3 20.1 Candian equity 2.4 25.5 Cdn. equity (Pure) 3.2 31.1 Cdn. income trusts 2.1 25.6 Cdn. money-market 0.1 2.1 Canadian mortgage 1.0 4.7 Cdn. short-trm bond 0.9 4.6 Cdn. small-to-mid-cap eq. 3.4 38.3 Cdn. tactical asset alloc..2.0 16.6 Emerging mkts. equity 5.2 40.9 European equity 4.4 27.0 Financial services 4.7 28.9 Foreign bond 2.1 0.5 Global bal./asset alloc. 2.8 17.7 Global equity 3.9 23.5 Health care 6.1 23.3 High-yield bond 1.8 15.3 International equity 4.2 26.9 Japanese equity 3.9 31.3 Labour-sponsored 1.0 -1.8 Latin American equity 4.4 52.4 Natural resources -1.5 33.7 North American equity 3.1 19.0 Precious metals -6.5 29.2 Real estate 2.7 20.0 Science & technology 6.9 38.7 Specialty/miscel. 2.1 21.2 U.S. equity 3.4 18.0 U.S. money market 0.1 -0.3 U.S. small-to-mid-cap eq. 4.9 26.9
SOURCE: GLOBE HYSALES
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