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Mutual Fund News

Lock in gains from hot-performing sector funds

WHAT ARE WE LOOKING FOR?

Long-term duds that have come to life in the past year.

TODAY'S SEARCH

We started with funds sporting a 10-year compound average annual returns that rank in the bottom 25 per cent of their respective categories. Fourth-quartile funds, in other words. We then discarded all but those funds with first-quartile results in the past 12 months (returns in the top 25 per cent for a category). Funds on our list are ranked by their one-year returns, and we've shown their 10-year average annual returns so you can assess how out-of-character the recent results are.

SO WHAT DID WE TURN UP?

A variety of sector funds, which isn't surprising because these funds often exhibit boom-bust characteristics. Smart investors should try to lock in their gains in these funds rather blindly holding on for the long term. Consider AGF Asian Growth Class, which has done exceptionally in the past year. The background here is that this fund is in the Asia ex-Japan category, where the average fund lost money in five of the past 10 years.

Ethical Growth offers an example of how a long-term wretch of a fund can be revived by a new manager. Robert Hammill of Guardian Capital has been running Ethical Growth for three years and returns since then have regularly been above average. This is great news for loyal unitholders, who received less than half of what the S&P/TSX composite index made in the past 10 years, dividends included.

Trimark Global Endeavour deserves a close look here because it's one of the largest funds on the list. This fund's one-year numbers are great, but the long-term performance is weak and returns over the past six months have been negative while the entire global equity fund sector has made money on average.

Check out a fund's long- and short-term numbers on Globefund, and be sure to look at the annual numbers as well. Regular fund reports go back to 2000 with their annual numbers, and you'll find more data in the site's 15-year review.

rcarrick@globeandmail.com

New life for old funds

(As of July 2007)Net AssetsLast Reported1 year10 year
Name($-millions) MERAsset classreturn (%)return (%)
AGF Asian Growth Class63.72.99Asia Pacific ex-Japan 49.78-1.63
Caldwell Canada89.02.75Canadian Small or Mid Cap 43.152.52
AGF Cdn Small Cap375.92.73Canadian Small or Mid Cap 34.273.92
CIBC Canadian Resource112.02.48Natural Resources 32.989.22
Altamira Special Growth125.31.92Canadian Small or Mid Cap 31.877.44
Mavrix Growth13.43.18Canadian Small or Mid Cap 31.11-8.95
AGF Germany Class15.13.19Miscellaneous29.611.33
AGF Aggressive Global Stock81.53.12Global Small/Mid Cap 29.166.36
Trimark Global Endeavour1,913.32.39Global Small/Mid Cap 28.716.81
Altamira Resource161.32.65Natural Resources 27.009.97
Acuity Clean Environment 92.92.85Canadian Focused Small/Mid Cap 26.905.12
IA Clarington Canadian Growth55.42.48Canadian 26.714.19
AIC Advantage1,142.92.47Canadian Focused 23.734.9
Renaissance Canadian Growth222.32.49Canadian Focused 23.695.89
AIC Advantage II835.32.73Canadian Focused 23.274.91
Desjardins Canadian 197.12.19Canadian 22.485.14
GGOF Enterprise Mutual156.32.75Canadian Small or Mid Cap 22.467.61
Ethical Growth440.22.37Canadian Focused 20.604.24
Caldwell Balanced48.82.75Global Balanced20.052.08
Altamira Equity749.62.64Canadian Focused 18.655.37

Combined assets from all series

© 2007 The Globe and Mail. All rights reserved.

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