WHAT ARE WE LOOKING FOR?
The stock markets have been extremely volatile in recent days, raising questions about what's ahead for this year. Let's see how mutual fund managers view the prospects for 2008.
One way to measure a manager's take on the markets is to see how much cash he or she is holding. Cash doesn't return much these days, but it's utterly bear-proof in a down market. Here, we've taken funds in major equity and balanced categories and ranked them by the percentage of cash they held as of their most recent portfolio reporting date. To be sure we're looking at funds of influence, we've used a minimum size of $350-million in assets and limited the field to funds that have been above average in the past one- and five-year periods (first- or second-quartile rankings).
SO WHAT DID WE TURN UP?
A distinct indication of cautious thinking by some managers. Notice the number of dividend, balanced and monthly income funds that made the list. These funds hold billions of dollars invested by mom and pop investors and the last thing they want to do is upset anyone. Holding cash cushions any market dips ahead, and it positions the manager to snap up good stocks with falling prices.
Notice also the prevalence of value funds on the list. Value managers focus on bargain-priced stocks. If they're holding a lot of cash, it suggests the markets are high and that better deals may be ahead. Less common on the list are mainstream equity funds, which tend to keep just a very small percentage of their assets in cash. Some prominent names that do show up are CI Harbour, Fidelity NorthStar, Altamira Equity and AIM Canadian Premier.
What's ahead for the markets in 2008? Some of the country's successful mutual funds managers seem somewhat wary.
Ranked by cash holding
|Fund name||Category||Net assets (000s) (as of Nov. 2007)||Last reported holding date||% in cash||Performance (as of Nov. 2007) 1-yr quartile||Performance (as of Nov. 2007) 5-yr quartile|
|Mackenzie Cundill Value 'C'||Global Equity||6,830,652||31-Oct-2007||24.5||2||1|
|CI Harbour||Canadian Focused Equity||5,128,927||30-Nov-2007||19.6||1||2|
|CIBC Monthly Income||Canadian Equity Balanced||7,080,969||31-Oct-2007||19.1||2||1|
|CI Signature Canadian Balanced||Canadian Equity Balanced||1,557,442||30-Nov-2007||17.4||2||1|
|CI Signature Income & Growth||Canadian Equity Balanced||2,480,857||30-Nov-2007||16.8||2||1|
|Mackenzie Univ Canadian Balanced||Canadian Equity Balanced||427,761||31-Oct-2007||16.5||1||2|
|Dynamic Global Value Fund||Global Equity||565,974||28-Sep-2007||14.7||1||1|
|Dynamic Dividend||Canadian Focused Equity||501,483||28-Sep-2007||14.5||1||2|
|CI Signature Select Canadian||Canadian Focused Equity||4,158,429||30-Nov-2007||14.2||2||1|
|CIBC Dividend||Canadian Dividend & Incm Equity||910,872||31-Oct-2007||14.1||2||2|
|Fidelity NorthStar-A||Global Equity||1,664,342||29-Jun-2007||13.3||2||1|
|Fidelity Canadian Asset Alloc.-A||Canadian Equity Balanced||2,528,399||29-Jun-2007||11.3||1||2|
|TD Monthly Income||Canadian Equity Balanced||4,720,859||31-Oct-2007||10.5||1||1|
|Capital Intl - Global Equity A||Global Equity||1,091,146||29-Jun-2007||10.0||2||1|
|Dynamic Dividend Value||Canadian Focused Equity||395,999||28-Sep-2007||9.5||2||1|
|MD Dividend||Canadian Equity Balanced||1,395,807||30-Nov-2007||9.0||2||2|
|Altamira Equity||Canadian Focused Equity||735,741||30-Nov-2007||9.0||1||2|
|AIM Canadian Premier||Canadian Focused Equity||827,185||31-Oct-2007||8.7||2||1|
|Manulife Monthly High Income Fund||Canadian Equity Balanced||3,672,868||30-Nov-2007||8.3||1||1|
|Renaissance Canadian Monthly Income||Canadian Income Trust Equity||440,468||31-Oct-2007||8.1||1||2|
|Dynamic Canadian Dividend Fund||Canadian Focused Equity||1,239,446||28-Sep-2007||7.7||2||1|
|TD Dividend Income||Canadian Equity Balanced||3,265,399||31-Oct-2007||7.5||2||1|
|SEI U.S. Large Co. Equity-O||U.S. Equity||1,068,026||31-Oct-2007||6.7||2||2|
|TD Dividend Growth||Canadian Dividend & Incm Equity||2,832,735||30-Nov-2007||6.6||1||1|
|Dynamic Value Fund of Canada||Canadian Focused Equity||718,009||28-Sep-2007||6.5||1||1|
|RBC Tax Managed Return||Canadian Equity Balanced||1,863,786||31-Aug-2007||6.5||2||2|
|Ethical Growth||Canadian Focused Equity||417,052||31-Aug-2007||6.5||2||2|
© 2007 The Globe and Mail. All rights reserved.
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