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Mutual Fund News

Funds that feasted on Potash Corp. and RIM

rcarrick@globeandmail.com

WHAT WE'RE UP TO

Two of the biggest drivers of the Canadian stock market in the past 12 months have been Potash Corp. of Saskatchewan and Research In Motion. Let's see which mutual funds have benefited most from the rise of these two stocks.

TODAY'S SEARCH

Funds in all categories were ranked according to their combined portfolio weighting of Potash Corp. and RIM, as of their most recent reporting dates. To see how well this investment decision has worked out, each fund's quartile ranking for the past year is included. Quartiles divide funds in a category into four groups according to their returns. First quartile is best, fourth quartile is the bottom.

SO WHAT DID WE TURN UP?

Lots of funds that have feasted off Potash Corp., up 169 per cent in the 12 months to May 22, and RIM, up 129 per cent over that period. In fact, 15 of the 25 funds with the heaviest concentration in these two stocks have been first quartile in the past year.

Credit the managers of these funds with shrewd and gutsy calls in loading up on RIM and Potash Corp. Hundreds of funds own these stocks, but the vast majority have played it cautious and kept their exposure low. Of course, emphasizing particular stocks brings risks as well as rewards. Almost a decade ago, many funds were loading up on Nortel Networks. You know how well that worked out in the end.

Possibly the most notable fund on the list is TD Canadian Equity. It's rare to see a giant fund of any kind, never mind a bank fund, make such a big bet on stocks that have speculative aspects to them. So far, the managers of TD Canadian Equity are looking good on this call. The fund is top quartile in the past year, and the average three-year return of 20 per cent beats both its peer Canadian equity funds and the S&P/TSX composite index.

Speaking of indexes, you'll notice a few index-tracking exchange-traded funds on our list. They're a reminder that stocks on the rise will account for a growing chunk of their respective stock indexes. Example: RIM alone accounts for 27.4 per cent of the iShares Cdn Tech Sector Index Fund.

Funds with RIM/POT Exposure

Combined
AssetsLast reportedLast reportedRIM/POT1-year
Fund nameCategory('000)MER dateMERholding dateexposurequartile
iShares CDN Tech Sector IndexSci. & Tech. Equity84,4243/31/20080.554/30/200825.46%1
iShares CDN Growth IndexCanadian Equity43,2763/31/20080.503/31/200821.28%1
Desjardins EnvironmentCanadian Equity132,7001/31/20072.354/30/200814.54%1
Manulife Canadian Equity Fund - ACdn. Focused Equity474,26712/29/20062.234/30/200811.38%1
TD Canadian EquityCanadian Equity3,293,0794/30/20082.094/30/200811.36%1
Manulife Canadian Equity ClassCdn. Focused Equity15,1844/30/20072.494/30/200811.14%1
Putnam Canadian Equity-ACanadian Equity26,19612/31/20072.623/31/200810.64%3
Manulife Canadian Core FundCanadian Equity320,86812/29/20062.484/30/200810.23%1
Manulife Canadian Core ClassCanadian Equity41,4734/30/20072.744/30/200810.17%1
iShares CDN LargeCap 60 IndexCanadian Equity8,717,8603/31/20080.173/31/20089.85%1
Altamira Capital GrowthCanadian Equity87,3214/30/20082.133/31/20089.74%1
GGOF Canadian Equity Fund Ltd. MutCanadian Equity57,99812/31/20072.473/31/20089.47%2
TD Diversified Monthly Income - ACdn. Equity Balanced4/30/20082.214/30/20089.40%3
National Bank Strategic Yield ClassMiscellaneous70,0644/30/20080.763/31/20089.39%2
National Bank Canadian IndexCanadian Equity18,5144/30/20081.133/31/20089.33%1
Altamira Precision Cdn IndexCanadian Equity199,1194/30/20080.533/31/20089.25%1
Standard Life Cdn Equity Focus - ACanadian Equity5,1114/30/20082.464/30/20089.11%1
United-Cdn Equity Growth Pool Cl WCdn. Focused Equity135,9894/30/20080.204/30/20089.05%1
BMO Canadian Equity ClassCanadian Equity16,6729/28/20072.451/31/20089.05%1
Hartford Canadian Stock DCanadian Equity20,6384/30/20082.0012/31/20078.98%2
BMO EquityCanadian Equity2,136,7849/28/20072.301/31/20088.95%2
IA Clarington Canadian GrowthCanadian Equity49,6014/30/20082.494/30/20088.92%4
Manulife Sector Rotation FundCanadian Equity116,23812/29/20062.694/30/20088.81%2
Middlefield Global Growth ClassGlobal Equity3444/30/20082.793/31/20088.65%
Sceptre Canadian Equity - ACanadian Equity30,07912/29/20061.691/31/20088.60%3
imaxx Canadian Equity GrowthCanadian Equity24,7024/30/20082.683/31/20088.32%2
Dynamic Power American Gwth ClU.S. Equity91,0676/29/20072.592/29/20088.01%1
TD Canadian IndexCanadian Equity867,8864/30/20080.854/30/20088.01%2
IA Clarington Canadian LeadersCanadian Equity81,5984/30/20082.404/30/20087.98%1
Dynamic Power American GrowthU.S. Equity216,4806/29/20072.552/29/20087.98%1
Desjardins Canadian EquityCanadian Equity497,4891/31/20072.193/31/20087.93%4
SEI Canadian Equity-OCanadian Equity2,365,0184/30/20080.093/31/20087.81%1
Altamira EquityCdn. Focused Equity737,9624/30/20082.633/31/20087.66%1
Quadrus GWLIM Cdn GrowthCanadian Equity17,1906/29/20072.653/31/20087.59%2
iShares CDN Composite IndexCanadian Equity486,2643/31/20080.253/31/20087.52%2
Dynamic Power Global Growth ClGlobal Equity223,3916/29/20072.672/29/20087.50%1
iShares CDN Jantzi Social IndexCanadian Equity31,4933/31/20080.503/31/20087.49%

SOURCE: GLOBEFUND

© 2007 The Globe and Mail. All rights reserved.

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