WHAT ARE WE LOOKING FOR?
Canadian stock funds that have escaped relatively unscathed in the recent market downdraft.
By Wednesday, the S&P/TSX composite index had tumbled 11 per cent from a peak of 15,073 points on June 18.
Commodity stocks, which have been the engine for markets earlier this year as financials have stumbled, have taken a big haircut. Falling crude prices have taken a toll on energy stocks, while gold and fertilizer stocks have also been under selling pressure.
We checked out the returns from June 18 to Aug. 6 for Canadian equity and Canadian focused equity funds (which can invest up to 50 per cent in foreign stocks). We went with the class of the fund with the most assets.
SO WHAT DID WE TURN UP?
Most top performers were Canadian focused equity funds, which use a value-investing approach of buying cheap stocks in the hope they will eventually be rewarded by the market. These funds have been among the laggards over the past year because they hold little if any commodity stocks.
Trimark Canadian Endeavour led by Clayton Zacharias narrowly managed to stay in positive territory with a 0.1-per-cent gain. The fund, which has had a rough time over the past year, was 30 per cent invested in financial stocks, and 32 per cent in consumer discretionary names at June 30.
Top holdings included Power Corp. of Canada, Toronto-Dominion Bank, IGM Financial Corp. Inc., Bank of Nova Scotia, and Thomson Reuters Corp. Consumer names included Liz Claiborne Inc. and Pool Corp.
Mackenzie Cundill Canadian Security, led by manager Wade Burton, who uses a deep-value approach to investing, was off 0.2 per cent.
At June 30, the fund's top names included Celestica Inc. and BCE Inc., but it also held battered stocks like West Fraser Timber Co., MI Developments Inc. and Loblaw Cos. Ltd. "The year ending June 2008 has undoubtedly been one of the most difficult in the history of the fund," its managers said in a report.
Mackenzie Ivy Canadian Fund, led by veteran manager Jerry Javasky, was only down by 0.7 per cent. At June 30, it was 31-per-cent invested in consumer staples, while 12 per cent was in energy stocks and nearly 7 per cent in cash.
The biggest holdings included McDonald's Corp., Shoppers Drug Mart Corp., Imperial Oil Ltd., Enbridge Inc., Manulife Financial Corp., and Toronto-Dominion Bank.
Jonathan Wellum's AIC Diversified Canada Fund fell 3.7 per cent. The fund was 52 per cent invested in the financial sector at June 30, while 15 per cent was in energy stocks.
Among its top holdings were names such as Toronto-Dominion Bank, Power Financial Corp., Manulife Financial, Thomson Reuters and Royal Bank of Canada. Non-financial stocks include Brookfield Asset Management Inc., and Canadian Oil Sands Trust.
Top 25 best-performing funds
|Assets ($-mil)||Latest||June 18||% return (as of July 31 '08)|
|Fund name||Category||as of June '08||MER||to Aug 6||YTD||1-year||3-year||5-year|
|Trimark Canadian Endeavour||Cdn. Focused Equity||1,073.6||2.13||0.1||-13.2||-26.7||-4.4||3.9|
|Mackenzie Cundill Cdn Security 'C'||Cdn. Focused Equity||1,861.3||2.41||-0.2||-9.5||-16.6||-0.8||5.4|
|AGF Canadian Value||Cdn. Focused Equity||220.7||2.40||-0.7||-10.4||-12.9||2.3||6.5|
|Mackenzie Ivy Canadian||Cdn. Focused Equity||2,542.0||2.36||-0.7||-5.8||-7.2||-1.0||3.8|
|Beutel Goodman Canadian Intrinsic||Cdn. Focused Equity||2.2||1.44||-0.7||-2.8||-6.6||6.1||7.4|
|NexGen North American Large Cap-CG||Cdn. Focused Equity||0.1||2.65||-1.7||-2.8||-6.3|
|Mackenzie Ivy Canadian (Hedged)-A||Cdn. Focused Equity||3.7||-1.8||-7.6||-6.5|
|Standard Life Diversified Income-A||Cdn. Focused Equity||7.7||2.44||-2.3||-1.1||-0.4||1.7|
|Alto MI Global Growth Port A||Cdn. Equity||14.7||-2.7|
|Trimark Canadian Focus Class A||Cdn. Equity||6.6||2.61||-3.0||-6.4||-9.2|
|Sarbit Canadian Equity Trust||Cdn. Equity||2.23||-3.2||-1.9|
|Investors Cdn Large Cap Value-A||Cdn. Focused Equity||2,608.0||2.69||-3.3||-4.2||-8.8||6.0||11.4|
|AIM Trimark Core Canadian Equity Cl||Cdn. Focused Equity||101.9||2.21||-3.3||-6.3||-10.2||4.0||10.4|
|AIC Diversified Canada||Cdn. Focused Equity||1,056.4||2.44||-3.7||-5.7||-8.3||2.2||4.9|
|Sentry Select Diversified Total Rtn||Cdn. Focused Equity||8.0||2.47||-3.8||-7.0||-9.9||4.7|
|Mackenzie Univ Canadian Growth||Cdn. Focused Equity||1,022.5||2.36||-3.9||-0.5||-1.4||6.2||10.1|
|Trimark Cdn Plus Dividend Class A||Cdn. Focused Equity||14.5||2.48||-3.9||-6.7||-12.9|
|Trimark Select Canadian Growth||Cdn. Focused Equity||2,692.0||2.31||-4.0||-7.4||-10.4||2.1||7.3|
|Trimark Canadian Equity Private Pl||Cdn. Focused Equity||48.6||2.07||-4.0||-6.9||-9.9|
|NexGen Canadian Large Cap-CG||Cdn. Focused Equity||0.1||2.65||-4.1||-0.8||-4.4|
|Northwest Canadian Equity||Cdn. Focused Equity||319.4||2.52||-4.2||-11.2||-20.7||0.9||7.5|
|Trimark Canadian-SC||Cdn. Focused Equity||742.8||1.65||-4.2||-7.1||-15.4||0.0||5.4|
|Mackenzie STAR Cdn Max Equ Growth||Cdn. Focused Equity||3.2||2.65||-4.6||-7.7||-10.1||0.5||4.0|
|Beutel Goodman Canadian Equity Plus||Cdn. Focused Equity||0.8||1.29||-4.7||-4.5||-7.4||4.7||9.4|
|RBC North American Value||Cdn. Focused Equity||157.7||2.00||-4.8||-1.0||-1.0||9.3||12.6|
|S&P/TSX composite index||-10.7||-1.7||-2.0||9.3||13.4|
Note: Funds are valued daily SOURCE: GLOBEFUND
© 2007 The Globe and Mail. All rights reserved.
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