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Mutual Fund News

Big funds tend to deliver for their investors

What are we looking for?

Let's put the country's most popular mutual funds in our crosshairs today - do they deserve the trust of the investors who have given them billions of dollars?

Today's search

We'll start with a list of the largest mutual funds as measured by asset levels at July 30. We'll then thin the ranks by eliminating all funds without a 10-year track record. To determine whether a fund is doing the job or not, we listed its 10-year average annual return and the quartile ranking of this return. A fund with a 10-year return in the top 25 per cent for its category would be first quartile, and a fund in the bottom 25 per cent would be fourth quartile. All other funds would be either second or third quartile, which means above or below the midpoint.

So what did we turn up?

A clear pattern of big funds doing right by the investors who own them and the investment advisers who sell them. All but one of the 10 most widely held funds had first-quartile returns over the past decade, and only a single fund on the entire list was in the cellar-dwelling fourth quartile. Mackenzie Ivy Canadian, come on down.

This fund has been a chronic underperformer for about five years now, although it does offer a very low level of volatility. RBC Balanced is another notable underachiever on our list, but if you check its more recent numbers you'll see it regularly delivering above-average returns. And then there's Templeton Growth, at one time the largest mutual fund in Canada by far and now just another face in the crowd. Blame years of below-average returns for the fact that assets in this fund are less than half of what they were seven years ago.

rcarrick@globeandmail.com

BIGGEST 25 FUNDS

Ordered by largest assets. Returns to July 31. All Segregated, $U.S. and Money Market Funds are excluded.

Fund nameAsset classNet assetsMER10yr. return10yr. Quartile ranking
Investors DividendCanadian Equity Balanced13,617,206.002.967.74%1
TD Canadian BondCanadian Fixed Income8,950,494.001.075.90%1
RBC Canadian DividendCanadian Dividend and Income Equity8,897,704.001.7312.00%1
RBC BalancedCanadian Neutral Balanced8,726,971.002.285.90%3
Mackenzie Cundill ValueGlobal Equity7,193,736.0029.50%1
CI Canadian InvestmentCanadian Focused Equity6,561,222.002.311.10%1
BMO DividendCanadian Dividend and Income Equity5,921,452.001.7312.80%1
Trimark Select GrowthGlobal Equity5,775,693.002.356.10%1
CI Harbour Growth & IncomeCanadian Neutral Balanced5,414,184.002.357.70%1
CI HarbourCanadian Focused Equity4,929,105.002.3510.70%1
Templeton Growth Fund Ltd.Global Equity4,797,240.002.343.70%3
RBC Cdn EquityCanadian Equity4,795,375.001.999.50%2
RBC Select BalancedGlobal Equity Balanced4,378,794.001.685.50%2
CI Signature High IncomeCanadian Equity Balanced4,324,279.001.5511.00%1
MD GrowthGlobal Equity4,041,560.001.444.70%2
RBC BondCanadian Fixed Income3,814,820.001.464.10%3
Mackenzie Ivy CanadianCanadian Focused Equity3,743,316.002.45.70%4
Trimark FundGlobal Equity3,741,686.001.617.60%1
AGF International ValueGlobal Equity3,402,615.002.86.80%1
Trimark Select Canadian GrowthCanadian Focused Equity3,398,501.002.327.20%3
AGF Canadian Large Cap Div-ClassicCanadian Focused Equity3,384,059.001.848.50%2
RBC Select ConservativeGlobal Neutral Balanced3,342,850.001.655.50%2
PH&N Dividend Income-ACanadian Focused Equity3,279,150.001.1413.30%1
TD Canadian EquityCanadian Equity3,053,929.002.1110.70%1
Mackenzie Ivy Growth & IncomeCanadian Equity Balanced3,039,460.002.146.00%2
TD Dividend IncomeCanadian Equity Balanced3,008,313.001.9610.10%1
Mackenzie Ivy Foreign EquityGlobal Equity2,731,373.002.465.90%2

SOURCE: GLOBEFUND.COM

© 2007 The Globe and Mail. All rights reserved.

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