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Mutual Fund News

STARS AND DOGS

A selection of winners and losers in mutual funds

DOG

HBP NYMEX Oil Bear Plus-A

Down 66.6% in 2007

Bad idea: Betting against the price of crude oil in 2007. Really bad idea: Buying the Horizons BetaPro NYMEX Oil Bear Plus-A Fund, which is designed to produce roughly double the opposite returns of an index tracking the price of the black stuff. In other words, if crude rises, you feel twice as much pain. With geopolitical turmoil and OPEC production cuts pushing crude to record levels, owning this thing was about as much fun as getting a dipstick up your nose.

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STAR

National Bank Quebec Growth

Up 32.2% in 2007

How do you say "kick-ass returns" in French? National Bank's Quebec Growth Fund invests in companies that have their head office or a substantial part of their business in La Belle Province, so unitholders "will thus be able to participate in Quebec's economic growth." And what's the rest of Canada, chopped liver? Not that investors are complaining: With companies such as Genivar Income Fund and ADF Group posting boffo gains, nothing beats a little French immersion.

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STAR

BMO Special Equity

Up 23.8% in 2007

I'm special, so special. BMO's Special Equity Fund lived up to its name in 2007, thanks to bets on small and mid-sized companies that paid off with big returns. Construction and engineering firm Aecon Group, for instance, gained 257 per cent; fertilizer maker Hanfeng Evergreen jumped 245 per cent; and specialty metals producer Timminco soared more than 7,000 per cent. Last year was not flash in the pan: The funds' five-year average return of 21.5 per cent is especially special for investors.

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STAR

Sprott Growth

Up 35.1% in 2007

Small is beautiful. Just ask Peter Hodson. With small-cap companies such as Absolute Software, Hanfeng Evergreen and points International turning in big returns, Mr. Hodson's Sprott Growth Fund gained a sizzling 35 per cent last year, making it one of the hottest Canadian stock funds. Sprott Growth has been around only since January, 2006, so it's too early to say whether it's got staying power. But Mr. Hodson is proving he's no small fry.

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DOG

Brandes Canadian Equity

Down 27% in 2007

Want to make money in stocks? Just watch what the Brandes Canadian Equity Fund does - and don't do it. The fund showed an uncanny knack for picking clunkers last year. Consider Nortel networks, Intertape Polymer and Kingwsay Financial Services, all of which fell about 50 per cent. We could go on, but we only have so much room here. If you're looking for a contrarian indicator, you could do worse than this dud, which has a three-year average return of minus 6.2 per cent.

© 2007 The Globe and Mail. All rights reserved.

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