WHAT ARE WE LOOKING FOR?
Canadian stock mutual funds with the biggest wads of cash before the bottom fell out of the market this fall.
During this volatile time from Aug. 29 to Dec. 22, the S&P/TSX composite index sank 40.1 per cent; the S&P/TSX small cap Index shed 49 per cent and the S&P 500 Index tumbled 32.1 per cent.
We asked Globefund analyst Victor Tan to screen Canadian stock funds for those with the highest cash levels on Aug. 31, and their year-to-date return to Dec. 22. We excluded segregated and pooled funds, and those with less than a one-year track record. We also left out the U.S. dollar and other versions of the funds.
WHAT DID WE TURN UP?
The high cash cushion helped soften the blow of red ink in most cases among small and giant funds.
Four NexGen funds were among the top holders of cash, ranging from just over 32 per cent in NexGen Canadian Growth to 63 per cent in NexGen North American Small-Midcap Cap Fund.
"We move our cash significantly, and we are ... quite comfortable with doing it," said Robert McWhirter, fund manager and president of Selective Asset Management Inc.
He became cautious after the U.S. markets peaked in October, 2007, and "was concerned that the Canadian markets were going to play catch-up on the downside."
The manager, however, has since slashed cash in most of his NexGen funds. For instance, the cash in NexGen Canadian Growth fell to about 13 per cent this week. It had risen to as high as 55 to 60 per cent of the fund this fall.
"We think there is a good opportunity for a significant rally starting now to the end of February," Mr. McWhirter said. "It looks like the market in the near term appears to have discounted the bad news. ... But we think this is a rally in a bear market."
Others have also pared down their cash. The giant CI Harbour fund run by Gerry Coleman had just less than 10 per cent in cash at the end of November compared with 19 per cent on Aug. 31. That fund lost 29.1 per cent as of Dec. 22, compared with the S&P/TSX Composite's 40.4-per-cent loss.
Mackenzie Universal Growth, however, had boosted its cash to 30 per cent by the end of November from 20 per cent on Aug. 31. The fund, which is run by Bluewater Investment Management, lost 25.3 per cent to Dec. 22.
|Top 25 Canadian Equity funds with largest cash holdings as of Aug 31/08|
|(as of Nov '08)||Latest||(Aug. 31)||(as of Dec. 22)||% returns (as of Nov. 30, 2008)|
|Fund name||Category Assets ($-mil)||MER||% Cash||YTD % return||YTD||1-yr||3-yr||5-yr||10-yr|
|NexGen NA Small/Mid Cap-CG||Canadian Small or Mid Cap Equity||0.6||2.65||63.00||-21.3||-15.4||-13.0|
|NexGen Cdn Dividend & Income-CG||Canadian Dividend and Income Equity||0.0||2.65||44.36||-15.6||-12.0||-12.5|
|Dynamic FocusPlus Small Business||Canadian Small or Mid Cap Equity||53.3||4.42||42.22||-22.9||-21.5||-19.7||5.6||12.4||6.7|
|NexGen North American Value-CG||Canadian Focused Small/Mid Cap Equity||0.1||2.65||40.16||-30.9||-22.7||-20.3|
|Renaissance Millennium Next Gen||Canadian Small or Mid Cap Equity||80.3||2.59||35.51||-39.8||-36.8||-35.7||-5.0||3.9|
|NexGen Canadian Growth-CG||Canadian Focused Small/Mid Cap Equity||0.7||2.65||32.45||-31.4||-25.2||-23.4|
|JOV North American Momentum-A||Canadian Focused Small/Mid Cap Equity||4.0||2.98||31.79||-34.4||-33.4||-31.4||-0.9||1.9|
|National Bank Cdn Opportunities||Canadian Focused Equity||161.4||2.14||28.20||-32.1||-27.6||-27.1||-5.7||0.4|
|JOV Talisman-A||Canadian Focused Equity||10.8||2.81||27.51||-38.5||-32.8||-29.2||-12.5|
|Lakeview Disp Leadership Cdn Eq-A||Canadian Focused Equity||134.7||2.27||24.98||-23.8||-20.1||-17.2||-0.3|
|imaxx Canadian Small Cap||Canadian Small or Mid Cap Equity||0.6||2.87||23.83||-53.9||-49.9||-49.8|
|Lakeview Disp Leadership Hi Inc A||Canadian Small or Mid Cap Equity||130.6||2.26||22.98||-16.7||-13.9||-12.8||-2.1|
|Fidelity Canadian Growth Company-A||Canadian Focused Equity||266.4||2.46||22.80||-41.5||-34.4||-32.5||-6.1||2.3||5.3|
|Dynamic Dividend||Canadian Dividend and Income Equity||345.2||1.58||22.76||-29.0||-25.7||-25.3||-3.6||4.6||5.7|
|Dynamic FocusPlus Equity||Canadian Focused Equity||215.5||2.40||22.46||-24.3||-19.8||-19.4||-4.2||1.6||2.7|
|RBC North American Value||Canadian Focused Equity||116.9||2.00||22.04||-26.8||-23.1||-22.7||-0.9||5.7||6.3|
|Stone & Co. Growth Industries A||Canadian Small or Mid Cap Equity||0.5||3.57||21.90||-57.7||-57.0||-57.6||-23.5||-8.6|
|NexGen North American Large Cap-CG||Canadian Focused Equity||0.1||2.65||21.16||-27.2||-22.9||-23.4|
|NexGen Canadian Large Cap-CG||Canadian Focused Equity||0.1||2.65||21.01||-29.5||-23.1||-22.8|
|Mackenzie Univ Canadian Growth||Canadian Focused Equity||776.7||2.35||20.39||-25.3||-19.7||-19.6||-0.8||4.1||4.9|
|Stone & Co. Div Growth Cls Can A||Canadian Dividend and Income Equity||111.9||2.88||19.70||-28.4||-22.1||-20.7||0.1||7.9|
|CI Harbour||Canadian Focused Equity||4,284.9||2.30||19.15||-29.1||-24.6||-25.0||-1.4||6.8||8.0|
|BMO Special Equity||Canadian Small or Mid Cap Equity||193.5||2.39||18.14||-51.9||-48.5||-46.8||-5.5||3.7||5.9|
|Renaissance Canadian Monthly Income||Canadian Income Trust Equity||294.6||1.74||15.93||-28.0||-24.2||-22.8||-3.7||6.6||11.2|
|Quadrus Sionna Cdn Value Class||Canadian Equity||41.5||2.54||15.64||-29.3||-22.6||-21.3|
|S&P 500 composite||-40.6||-39.0||-39.5||-10.5||-3.3||-2.6|
|S&P/TSX composite index||-40.4||-33.0||-32.3||-5.0||3.4||3.9|
|S&P/TSX Small Cap||-53.9||-50.7||-49.8||-18.9||-9.6|
© 2007 The Globe and Mail. All rights reserved.
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