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Stock funds dragged through the dirt by the bear

swon@globeandmail.com

WHAT ARE WE LOOKING FOR?

Many stock funds have taken a shellacking by bear markets around the world. Let's look at just how badly these funds have been mauled.

The global financial crisis has wreaked havoc on stocks as investors become jittery about slower global growth. And stocks are getting whipsawed as managers dump securities to deal with redemptions or margin calls.

TODAY'S SEARCH

To see how active managers have been hit by the market downturn, we checked the worst year-to-date returns of stock funds to Oct. 8. This screen may not catch all funds if they are valued weekly or even monthly like many hedge funds. We also excluded exchanged-traded funds, other versions of the same fund and U.S. dollar-denominated funds.

SO WHAT DID WE TURN UP?

It's been ugly. Many stock funds have lost 50 per cent of their value so far this year.

They include smaller-company and emerging market funds whose riskier, less liquid stocks often get jettisoned by investors in market downturns in a flight to quality. Natural resource funds have also been pounded by plunging prices in commodities like oil and gold.

Funds using an earnings or price momentum strategy have also seen their holdings creamed as their stocks head south. Landry Morin Small Cap Momentum plunged 63 per cent, while Caldwell Canada has fallen 52 per cent.

Even funds with socially responsible mandates - like screening out companies that pollute - have not escaped unscathed. Mavrix Sierra Equity, a smaller-company fund, is down 56 per cent.

Looking at the returns, it's also a lesson for investors who chase performance. Last year's star can easily lose its shine.

While Sprott Growth was the best performing Canadian stock fund in 2007 with a 35.1-per-cent return, it had fallen 60 per cent by Wednesday.

Worst 30 stock funds - Oct 8, 2008 YTD

% rtn
(as of Sep/08)Oct. 8/08% return
Fund nameCategoryAssets (mil.)MERYTD2007200620052004
Landry Morin Small Cap momentum-FCdn. Small or Mid Cap Equity1.95-62.99.415.821.6
FrontierAlt Resource Capital Cl-ANatural Resources Equity7.2-61.5
Sprott GrowthCdn. Focused Sm/Mid Cap Eq150.05.79-59.535.1
Sentry Select Mining Opportunity ClNatural Resources Equity27.22.78-58.110.0
Middlefield Uranium Focused MetalsNatural Resources Equity2.52.35-56.0
Mavrix Sierra EquityCdn. Focused Sm/Mid Cap Eq8.72.94-55.621.114.021.619.8
Mackenzie Univ Wld Resource ClassNatural Resources Equity140.22.46-54.532.323.627.322.8
Scotia Latin AmericanMiscellaneous63.92.54-54.515.043.844.025.3
Mackenzie GrowthCdn. Focused Equity318.22.37-54.48.311.910.517.7
Mavrix GrowthCdn. Small or Mid Cap Equity3.93.21-54.11.335.68.4-11.2
Mavrix Multi Series GrowthCdn. Small or Mid Cap Equity0.12.14-54.0
DMP Resource ClassNatural Resources Equity187.510.44-53.0-5.144.340.47.5
Mavrix ExplorerNatural Resources Equity2.22.75-53.08.19.8-12.54.1
Acuity Canadian Small CapCdn. Small or Mid Cap Equity89.22.85-52.89.437.2
Excel ChinaGreater China Equity68.62.39-52.839.583.2-6.0-4.4
Frk Tmp Canadian Small CapCdn. Small or Mid Cap Equity1.02.78-52.55.528.618.9
Caldwell CanadaCdn. Small or Mid Cap Equity4.72.75-52.37.449.919.3-1.7
Galileo FundCdn. Focused Sm/Mid Cap Eq2.01-52.320.2
Stone & Co. Growth Industries ACdn. Small or Mid Cap Equity0.63.57-51.7-2.14.35.532.2
HSBC Chinese Equity-IGreater China Equity164.42.55-51.135.080.37.2
Excel Emerging Europe AEuropean Equity10.9-50.8
Acuity All Cap 30 Canadian EquityCdn. Focused Sm/Mid Cap Eq298.92.85-50.713.626.210.121.3
Sprott EnergyNatural Resources Equity173.02.86-50.617.96.142.4
Trans IMS Can-EmergeEmerging Markets Equity4.84.32-50.423.524.427.414.6
HSBC BRIC Equity-IEmerging Markets Equity78.32.60-50.1
Mavrix Asia PacificAsia Pacific Equity0.53.15-50.1
AGF Global Technology ClassScience and Tech. Equity6.43.50-49.65.41.80.0-13.5
Criterion Global Clean Energy CH-HMiscellaneous4.6-49.4
AGF China Focus ClassGreater China Equity251.52.96-49.330.567.68.6-9.3
Excel ChindiaMiscellaneous80.83.18-49.335.248.511.2
S&P 500 index -32.9 3.5 13.6 3.0 9.0
S&P/TSX composite index -27.3 7.2 14.5 21.9 12.5

SOURCE: GLOBEFUND

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