WHAT ARE WE LOOKING FOR?
The big losers among mutual funds in the recent Canadian stock market meltdown.
A sharp retreat in commodity stocks sent the S&P/TSX composite index tumbling 12 per cent by this past Tuesday from its record high of 15,073 points on June 18.
Falling crude prices have weighed heavily on oil stocks.
Gold and fertilizer stocks have also been under selling pressure recently. Fertilizer giant Potash Corp. was the biggest single drag on the index on Tuesday, tumbling 12.8 per cent to $180.50.
We checked out the returns of Canadian equity and Canadian focused equity funds (which can invest up to 50 per cent in foreign stocks) from June 18 to Aug. 5.
SO WHAT DID WE TURN UP?
The higher that stock funds climb, the harder they can fall.
Dynamic Power Canadian Growth, run by veteran portfolio manager Rohit Sehgal, was the top-performer among Canadian focused equity funds over one, three, five and 10 years to June 30.
But his fund, which was 80 per cent invested in energy and materials stocks, also suffered the most during the recent downturn. It fell 19 per cent in about seven weeks.
The top 10 holdings at the end of June included Petrobank Energy and Resources Ltd., Nexen Inc., Pacific Rubiales Energy Corp., Duvernay Oil Corp., Potash, Agrium Inc. and Research In Motion Ltd.
In a recent interview, Morningstar Canada fund analyst Jordan Benincasa described Dynamic Power Canadian Growth as a "turbo-charged growth fund" with an aggressive trading strategy.
"There is nothing wrong with it - that's the strategy," he said. "But investors should be aware of the downside risks of that strategy."
The Manulife Canadian Core Fund, run by Pat McHugh, was 53 per cent invested in energy and materials stocks at June 30. That fund, which lost 16 per cent, held stocks like Potash, EnCana Corp., Agrium, Nexen and Suncor Energy Inc. among its top holdings.
TD Canadian Equity Fund, under manager John Smolinski, was 65 cent invested in energy and materials stocks at the end of June. Its top stocks included Nexen, Suncor Energy, EnCana, Canadian Natural Resources Ltd., Potash and Research In Motion. The fund was off 15.6 per cent.
Even socially responsible funds were not immune.
The Investors Group Summa SRI Fund, Canada's largest socially responsible fund co-managed by Daniel McClure and Keith McLean, fell 14 per cent. The top holdings at May 30 included Potash, Research In Motion, EnCana, Pacific Rubiales, and Trican Well Service Ltd. It was 65 per cent invested in energy and materials stocks.
Top 25 worst-performing Canadian funds
|As of June '08||% return||% return as of July 2008|
|Fund name||Category||Assets ($-mil)||MER||Jun 18 - Aug 5||YTD||1-yr||3-yr||5-yr|
|Dynamic Power Canadian Growth||Cdn Focused Equity||2045||3.56||-19.33||-4.34||4.65||17.47||25.00|
|Investors Canadian Growth-A||Cdn Focused Equity||148||2.77||-18.26||-5.13||-3.83|
|Acuity Social Values Canadian Equ||Canadian Equity||52||2.85||-18.21||-11.57||-15.04||4.44||12.01|
|Acuity Canadian Equity||Canadian Equity||81||2.85||-17.99||-8.94||-12.93||4.98||13.00|
|Norrep Q Class-A||Canadian Equity||-16.92||-12.18||-20.45||7.35|
|Acker Finley Select Canada Focus-A||Canadian Equity||43||2.07||-16.91||-6.37||-12.06||5.37|
|Landry Morin Cdn momentum-F||Canadian Equity||1.79||-16.76||5.27||14.58||16.41||19.76|
|imaxx Canadian Equity Growth||Canadian Equity||28||2.68||-16.57||-3.42||-2.72||13.83||17.08|
|Manulife Canadian Core Fund||Canadian Equity||372||2.41||-16.41||-5.91||-3.91||9.91||15.65|
|AGF Canadian All Cap Equity||Canadian Equity||8||-16.29|
|Acuity Pure Canadian Equity||Canadian Equity||15||-16.20||-7.31|
|Altafund Investment Corp.||Canadian Equity||81||2.71||-16.02||2.82||6.86||13.61||20.20|
|TD Canadian Equity||Canadian Equity||3466||2.09||-15.64||3.25||6.11||15.19||19.45|
|iShares CDN Growth Index||Canadian Equity||50||0.50||-15.61||4.09||14.53|
|Manulife Canadian Equity Fund||Cdn Focused Equity||496||2.45||-15.43||-1.96||-2.09||10.46||13.71|
|Altamira Equity||Cdn Focused Equity||762||2.63||-15.16||-0.46||3.16||10.82||13.94|
|Keystone Sceptre Canadian Lrg Cap-A||Canadian Equity||29||2.62||-15.05||-3.03||-4.62||12.00||14.13|
|Desjardins Environment||Canadian Equity||146||2.35||-14.83||1.94||4.03||15.50||17.52|
|PH&N Vintage-A||Cdn Focused Equity||82||1.85||-14.70||4.61||4.39||11.09||12.69|
|Stone & Co. Flagship Stock-B||Cdn Focused Equity||50||3.08||-14.69||-16.22||-13.94||2.15||10.66|
|Sceptre Canadian Equity-O||Canadian Equity||155||-14.29||-2.81||-2.63||15.91||17.96|
|OTG Diversified||Canadian Equity||1.30||-14.18||-6.06||-11.62||8.79||14.42|
|Ethical Canadian Stock||Canadian Equity||581||-14.14||-5.86||-2.96|
|Investors Summa SRI FundTM A||Cdn Focused Equity||1749||2.69||-13.99||-6.50||-9.27||6.62||9.51|
|Bissett All Cdn Focus A||Canadian Equity||43||2.59||-13.98||-3.22||-4.97||10.47|
Note: Funds are valued daily SOURCE: GLOBEFUND
© 2007 The Globe and Mail. All rights reserved.
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