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The year of the global bond fund

Investment Editor; sadams@globeandmail.com

What are we looking for?

The top funds of 2008. Let's look at all classes of funds with more than $50-million in assets and rank them by returns for the year. Funds must have reported values as of Dec. 30, which means that most hedge funds are excluded as they usually don't report results until a week or two after month-end.

What did we find out?

It was very tough to make money last year, but it was the year of the global bond fund. With bonds outshining equities last year, and with the Canadian dollar falling against the U.S. dollar, many global bond funds had outstanding years. If you were smart enough to be diversified with global bond funds, then congratulations.

But before you load up on global bond funds for 2009, keep in mind that it's been a tough few years for most of them. Even with returns of more than 20 per cent or even 30 per cent last year, most of them are sporting five-year annualized returns of just a few per cent.

These funds do serve a purpose though. If you look back, many of these funds had great returns in 2002, which was another horrible year for equities. If you don't have global bonds in your portfolio now, you may want to put them on your "to do" list to protect yourself from the next downturn.

Some types of hedge funds can also be good to have during bear markets. Several hedge funds, such as CI Trident and the Sprott Bull/Bear RSP, would probably have made our list today of top funds of 2008, but their latest reported results are for the end of November.

Top performing funds with more than $50-million in assets for the year to date as of Dec. 30

5-yr
30 dayYTD% return
$ Price% return% returnannualized% returns
Fund nameDec. 30 to Dec. 30to Dec. 30to Nov. 302007200620052004200320022001
SEI Enhanced Global Bond-O 4.636.945.85.6-3.63.6-7.61.1-1.419.84.9
HBP 60 Bear + ETF 28.454.140.5
United Global Fixed Income Pl-W 11.447.839.34.4-5.64.8-8.52.2-4.218.44.2
Friedberg Global Macro Hedge (US$) 14.9112.339.224.9
CIBC Global Bond Index 11.195.837.73.6-6.74.7-10.31.4-7.618.14.6
United Global Fixed Income Pl-A 12.707.636.4
CI Global Bond 4.227.634.42.4-6.13.8-9.5-0.4-3.912.32.7
National Bank Global Bond 10.325.832.72.9-6.51.9-7.71.3-5.615.35.4
AGF Global Government Bond 11.925.427.12.8-6.83.0-6.73.1-0.119.5
TD Global Bond-I 9.556.426.80.9-8.24.0-11.30.3-5.616.34.6
Tmpltn Global Bond 9.643.524.34.8-6.513.4-7.93.5-2.018.44.5
Manulife Strategic Income Fund 10.643.621.6-2.64.3
Investors Global Bond 5.706.317.82.1-6.87.5-8.14.5-1.820.64.0
CIBC Global Bond 9.916.711.7-2.0-7.52.8-10.3-1.9-1.617.55.5
RBC Canadian Bond Index 11.863.711.25.34.13.05.15.84.97.27.0
SEI Long Duration Bond-O 10.396.38.98.54.83.118.311.7
Mackenzie Sen Mgd Return Class 13.172.48.94.00.52.93.85.25.5
London Life Govt Bond (GWLIM) 14.522.38.53.02.42.01.02.92.64.16.4
Investors Cap Yield Class-A 11.532.98.31.61.92.7
MB Short-Term Fixed Income 10.091.58.23.43.9
IA Group Bonds 140.233.08.15.62.74.66.77.47.49.88.1
iShares CDN Government Bond Index 20.852.97.74.1
ROI High Yield Pvt Placement-Sr A 117.090.67.7
National Bank Secure Diversified 10.281.77.53.42.92.61.43.74.04.75.7
MB Select Fixed Income 10.502.67.45.42.54.06.47.66.4
CIBC Cdn Short-Term Bond Index 10.091.47.43.73.13.11.44.03.95.38.4
TD Mortgage 61.361.07.33.32.03.21.63.23.66.27.1
Beutel Goodman Income 11.743.47.24.93.63.55.76.56.68.87.4
RBC Advisor Canadian Bond 11.213.17.04.63.13.05.66.15.77.77.1
MB Fixed Income 56.742.57.05.32.64.26.47.76.58.08.7
iShares CDN Short Bond Index 28.900.56.94.83.83.83.05.85.48.38.0
Integra Bond 16.483.06.84.74.04.43.96.06.810.36.8
Investors Government Bond 5.403.06.84.02.51.35.45.65.17.25.4

SOURCE: GLOBEFUND

© 2007 The Globe and Mail. All rights reserved.

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