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Which funds are rocking as materials roll?

WHAT ARE WE LOOKING FOR?

Alcoa's announcement that it wants to buy Canada's Alcan Inc. confirms that the frenzy of

mergers and acquisitions is still going in full force in the materials sector of the stock market. This got us curious about what mutual funds have the most exposure to materials stocks, which include mining companies, gold producers, forest products companies and steel makers.

TODAY'S SEARCH

All the various Canadian equity fund categories were scanned for their exposure to the materials sector, as were global, international and U.S. equity funds. For reference, materials stocks

account for about 16.5 per cent of the S&P/TSX composite index.

SO WHAT DID WE TURN UP?

Materials stocks are cyclical, which means they have their ups and downs. But with the sector on a long-term roll right now, there's a clear trend linking heavy exposure to materials with excellent returns. Sprott Canadian

Equity is the king of materials, with a 73-per-cent weighting

according to the numbers most recently filed with Globefund.com. Has this big bet worked out? Well, the fund made 17.7 per cent in the 12 months to April 30, compared with 10.9 per cent on average for its peers.

Dynamic Power Canadian Growth is another materials-heavy stock with strong numbers - its one-year return is 15.6 per cent. Heavy exposure to materials doesn't guarantee you big returns, though. CIBC Capital Appreciation had almost 27 per cent of its assets in materials and its one-year return was well below average at 6.6 per cent, while Acker Finley Canada Focus generated a return of 4.8 per cent with a

materials weighting of 34.5 per cent.

NEXT

Materials stocks are a performance enhancer right now, but they'll be a hindrance if commodity prices slump.

Monitor your own materials

exposure using the fund profiles on ReportonBusiness.com's Globefund.

%
YTD1-yr3-yrWeight
NAVAssetsReturnReturnReturnLast in
Fund (May 10)Asset Class ($-bil) (May 10)(Apr. 30)(Apr. 30)ReportedMaterials
Sprott Canadian Equity43.60Canadian Equity1.8913.217.731.131-Dec-0673.00
Acker Finley Select Cda Focus-A10.88Cdn. Div. & Equity Incm0.056.76.619.830-Mar-0735.21
Acker Finley Canada Focus21.65Canadian Equity (Pure)0.026.24.818.130-Mar-0734.52
Bissett All Cdn Focus F16.91Canadian Equity (Pure)09.716.3n-a29-Dec-0634.07
Dynamic Power Cdn Gwth27.60Canadian Equity1.4912.015.628.528-Feb-0732.53
Dynamic Power Cdn Gwth Class11.92Canadian Equity0.0512.013.527.628-Feb-0731.90
AGF Canadian Growth Equity71.05Canadian Equity1.0812.09.020.029-Dec-0629.98
IG AGF Cdn Divers. Gwth-A21.58Canadian Equity0.2612.39.620.029-Dec-0629.93
IG AGF Cdn Divers. Gro Class-A20.65Canadian Equity0.0211.78.918.629-Dec-0629.23
Lakeview Disp Leader. Cdn Eq-A13.28Canadian Equity0.115.81.5n-a28-Feb-0728.90
CI Alpine Growth Equity21.51Canadian Equity (Pure)0.088.42.016.730-Mar-0728.01
Norrep Q Class-A18.47Canadian Equity (Pure)0.0914.712.125.630-Apr-0727.00
CIBC Capital Appreciation33.52Canadian Equity (Pure)0.349.36.617.530-Mar-0726.76
MIX E&P Growth Oppor. Class22.94Canadian Equity (Pure)0.068.32.116.730-Apr-0726.38
Acuity All Cap 30 Cdn. Equity28.34Canadian Equity0.2412.615.418.030-Apr-0726.24
Elliott & Page Growth Oppor.38.91Canadian Equity (Pure)0.837.82.016.330-Apr-0725.50
NexGen Canadian Growth - CG10.64Canadian Equityn-a15.0n-an-a31-Mar-0725.48
Dynamic FocusPlus Equity13.19Global Equity0.374.45.09.228-Feb-0724.00
Standard Life Cdn Eq. Focus - A12.06Cdn. Div. & Equity Incm05.94.2n-a30-Mar-0723.32
MIX Global Oppor. Class9.95Global Equity0n-an-a30-Apr-0723.17
imaxx Cdn. Equity Growth21.48Canadian Equity0.0218.519.519.130-Mar-0723.10
Mavrix Sierra Equity5.23Canadian Equity0.0112.511.119.630-Apr-0723.06
TD Canadian Equity31.98Cdn. Div. & Equity Incm2.986.712.622.930-Mar-0722.33
Elliott & Page Cdn. Equity-Cl A38.29Canadian Equity0.339.014.119.730-Apr-0721.39
Middlefield U.S. Equity Class9.30U.S. Equity04.68.35.029-Dec-0621.18
MIX Cdn. Large Cap Gwth Class21.21Canadian Equity (Pure)0.018.813.819.230-Apr-0721.09
Desjardins Cdn. Equity Value20.56Canadian Equity (Pure)0.567.810.219.130-Mar-0720.94
iShares CDN MidCap Index95.62Canadian Equity (Pure)0.2410.916.020.630-Mar-0720.78
National Bank Cdn Oppor.13.60Canadian Equity0.244.59.19.630-Apr-0720.58

SOURCE: GLOBEFUND

© 2007 The Globe and Mail. All rights reserved.

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