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The senior citizens among Canadian stock funds


How Canadian stock funds have fared over the long haul.

Fund companies usually urge investors to ignore short-term volatility, and sit tight for the long term. In fact, "buy, hold and prosper," is the marketing mantra of AIC Ltd.

While firms benefit from fees charged to funds in all market conditions, let's see if investors can prosper too.


We asked Globefund analyst Victor Tan to screen for the best and worst average annual returns of Canadian stock funds with at least a 20-year record. We focused only on large-company funds, and excluded pooled, segregated, and duplicate funds.


Actively managed funds can outperform market benchmarks despite the hoopla about low-fee index funds.

Thirteen beat the 7-per-cent average annual gain by S&P/TSX Total Return Index over 20 years ending Jan. 31.

The only problem is that these funds with stellar records are survivors. Over the years, many of their peers have closed, or merged with others.

The records of these long-term, index beaters also belong to several people. And their investment styles may varied quite widely.

While Dynamic Power Canadian Growth has suffered lately, it is the star performer over 20 years with an average annual return of 9.7 per cent.

Rohit Sehgal, a growth manager, has been responsible for its strong performance over the past decade. When he took over in 1999, he overhauled the former Dynamic Canadian Growth, which had been run with a value approach of buying cheap stocks.

Part of that fund's strong record also belongs to Jonathan Baird, who ran it in the early days. He chalked up a 100-per-cent return in calendar 1993.

Altamira Equity came second with an average annual gain of 9.2 per cent over 20 years. Manager Frank Mersch, who ran the fund for over a decade, became a star from posting strong numbers in the early days. The same was true for Ian Ainsworth, who ran it during the runup to the technology bubble and bust.

After National Bank bought Altamira Investment Services Inc., Virginia Wai-Ping ran Altamira Equity from 2003 until she left the firm for personal reasons last year. Mark Jackson took over last month.

The worst record belongs to Mackenzie Growth. It only eked out a 1.2-per-cent average annual return over 20 years. Resource specialist Fred Sturm took over in 2002 from Alex Christ, a founder of Mackenzie Financial Corp. He ran the fund when it was known as Mackenzie Industrial Growth. The fund struggled in the 1990s from a big bet on the depressed resource sector.

Best 15 Canadian stock funds over 20 years
(as of Jan. '09) Latest % returns (as of Jan 31, 2009)
Fund name Category Assets ($-mil) MER 1-yr 3-yr 5-yr 10-yr 15-yr 20-yr
Dynamic Power Canadian GrowthCanadian Focused Equity1,104.54.09-50.5-
Altamira EquityCanadian Focused Equity406.32.63-33.7-
Bissett Canadian Equity-FCanadian Equity182.71.25-31.8-11.4-
IA Clarington Cdn Conservative EqtyCanadian Equity204.52.39-19.5-
Saxon Stock Fund-ISCanadian Equity236.51.86-34.4-11.6-
Dynamic Value Fund of CanadaCanadian Focused Equity840.62.43-27.4-
AGF Canadian Large Cap Div-ClassicCanadian Focused Equity2,053.51.80-30.7-
Teachers' RSP-Equity Section*Canadian Equity6.81.00-44.8-16.5-
AIC AdvantageCanadian Focused Equity385.32.42-48.8-19.5-8.1-
FÉRIQUE Equity**Canadian Equity248.70.83-29.7-
CI Canadian InvestmentCanadian Focused Equity3,519.72.25-28.8-
PH&N Canadian Equity-DCanadian Equity671.21.12-34.1-
Dynamic Dividend ValueCanadian Focused Equity347.71.59-31.4-
GGOF Canadian Equity Fund Ltd. MutCanadian Equity38.82.48-28.1-
Dynamic Canadian Dividend FundCanadian Focused Equity794.32.43-31.9-
Worst 15 Canadian stock funds over 20 years
Mackenzie GrowthCanadian Focused Equity210.32.38-56.6-23.9-9.50.1-0.21.2
Desjardins Canadian EquityCanadian Equity363.52.19-33.7-10.8-
IA Clarington Canadian GrowthCanadian Equity27.42.46-40.5-13.4-3.9-
Tmpltn Canadian StockCanadian Equity107.12.55-29.9-12.1-
CIBC Canadian EquityCanadian Equity342.52.20-35.6-11.2-
Mackenzie Maxxum Canadian ValueCanadian Focused Equity146.22.35-30.3-11.4-
Renaissance Canadian GrowthCanadian Focused Equity154.52.48-34.4-10.0-
Investors Retirement Gwth. Port.-CCanadian Focused Equity668.92.99-36.5-13.0-
Investors Cdn Large Cap Value-CCanadian Focused Equity1,699.92.84-36.5-13.4-
Investors Canadian Equity-CCanadian Focused Equity1,770.02.84-39.5-15.0-
Investors Summa SRI FundTM CCanadian Focused Equity837.82.84-45.2-16.7-6.3-
Ethical GrowthCanadian Focused Equity251.82.30-30.8-8.9-
National Bank Canadian EquityCanadian Equity313.62.30-29.2-8.5-
Scotia Canadian Blue ChipCanadian Focused Equity251.92.09-30.4-
Trimark Canadian EndeavourCanadian Focused Equity659.62.13-39.3-15.8-
S&P/TSX Total Return-31.8-
S&P/TSX composite index-33.9-

*For teachers only; **For Quebec engineers and their family


© 2007 The Globe and Mail. All rights reserved.

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