WHAT WE'RE LOOKING FOR
As a result of the subprime mortgage mess in the United States, the bad news flowing out of the financial sector seems never-ending. Canadian banks have been affected, but it's the U.S. financial sector that has been hurt the most by far. Let's see which U.S. equity funds are most exposed to the subprime problem, and how badly their returns have been damaged.
U.S. equity funds are ranked here in order of their exposure to financial stocks, which include banks, brokers and fund companies. One-year returns to Nov. 30 are displayed as well.
WHAT DID WE TURN UP?
We need some context to properly understand these numbers. First, the S&P 500 stock index lost 5.6 per cent over the past 12 months in Canadian dollars (with dividends included). Also, the S&P 500 itself has a weighting in financials of roughly 20 per cent.
The best way to describe the impact of a big weighting of financials on a U.S. equity fund: dead weight. With few exceptions, funds with more than an index weight in financials have underperformed the index, sometimes by alarming amounts. AIC American Focused, which has recently changed managers, is the most dramatic example here, but several other funds have delivered double-digit losses.
The complete screen results (we're displaying only the funds with the most exposure to financials) show that a majority of U.S. equity fund managers have sensibly limited their exposure to financials. A total of about 80 funds made our master list and 55 of them, including many of the biggest, had less than the index weighting in financials as of their most recent reporting dates. Good call.
Globefund.com's fund profiles include pie charts showing how much of a portfolio is invested in the various market sectors. Keeping an eye on this data can help you avoid nasty surprises.
|Company||Net assets||Last reported||Last reported||% in||One-year|
|$'000||MER date||MER %||holding date||financials||return %|
|AGF U.S. Value cl||42,655||30-Nov-07||2.85||28-Sep-07||54.16||- 16.50|
|AIC American Focused||424,061||29-Dec-06||2.49||28-Sep-07||52.39||- 37.93|
|AIC American Focused Corp. cl||54,321||29-Dec-06||2.35||28-Sep-07||51.88||- 37.44|
|Meritas U.S. Equity||11,775||31-Aug-07||2.87||31-Oct-07||37.70||- 11.29|
|AIM Trimark Core American Equity cl||5,047||30-Nov-07||2.68||29-Jun-07||35.33||- 7.79|
|Renaissance U.S. Equity Value||95,958||28-Feb-07||2.62||31-Oct-07||31.45||- 9.37|
|Imaxx US Equity Value||6,467||30-Nov-07||2.75||31-Oct-07||29.80||- 16.02|
|Acker Finley Select U.S. Value 50 - A||63,216||30-Nov-07||1.94||28-Sep-07||29.66||- 13.87|
|NWQ U.S. Large Cap Value||94,474||31-Dec-02||2.21||28-Sep-07||27.89||- 7.06|
|Leith Wheeler U.S. Equity||25,545||30-Nov-07||1.34||28-Sep-07||27.56||- 13.48|
|United-U.S. Equity Value Pool cl W||1,067,131||30-Nov-07||0.21||30-Nov-07||27.31||- 12.87|
|Northwest U.S. Equity||19,003||31-Oct-06||2.87||30-Nov-07||26.87||- 21.47|
|Manulife U.S. Mid-Cap Value cl||45,703||30-Apr-07||2.86||31-Oct-07||26.62||- 16.93|
|BMO U.S. Equity cl||3,668||29-Sep-06||2.48||31-Jul-07||24.82||- 11.01|
|RBC U.S. Index||54,418||30-Nov-07||0.85||31-Aug-07||22.93||- 6.57|
|Claymore U.S. Fundamental Index ETF||18,146||31-Oct-06||0.65||29-Dec-06||22.79||+0.38|
|Ferique American||133,789||30-Nov-07||0.96||31-Aug-07||22.49||- 7.82|
|TD U.S. Index||623,788||30-Nov-07||0.53||30-Nov-06||21.78||- 6.41|
|Saxon U.S. Equity Fund||9,028||29-Dec-06||1.86||30-Nov-07||21.16||- 14.16|
|Emissary U.S. Value||20,662||30-Nov-07||2.92||28-Sep-07||20.91||- 9.34|
|Manulife U.S. Large Cap Value cl||91,146||30-Apr-07||2.80||30-Nov-07||20.87||- 11.66|
|Manulife U.S. Core Fund||25,396||29-Dec-06||2.47||30-Nov-07||20.52||- 14.09|
|Mawer U.S. Equity||37,571||30-Nov-07||1.28||31-Aug-07||20.50||- 4.29|
|GGOF American Equity Fund Ltd. cl||17,023||29-Dec-06||2.25||31-Aug-07||20.29||- 10.49|
|Integra Analytic Core U.S. Equity||81,605||30-Dec-05||2.23||28-Sep-07||20.09||- 3.06|
|Desjardins American Equity Value||398,975||31-Jan-07||2.49||31-Oct-07||20.09||- 11.29|
|TD U.S. Index Currency Neutral-I||130,740||30-Nov-07||0.85||30-Nov-07||19.97||+5.00|
|Scotia U.S. Index||49,312||30-Nov-07||0.98||31-Aug-07||19.52||- 6.76|
|BMO U.S. Equity||536,123||29-Sep-06||2.39||31-Jul-07||19.43||- 4.22|
|AIM American Growth||21,236||30-Nov-07||3.12||31-Oct-07||19.19||- 9.60|
|SOURCE: GLOBE INVESTOR|
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