WHAT ARE WE LOOKING FOR?
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.
WHAT DID WE TURN UP?
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 Growth||Canadian Focused Equity||1,104.5||4.09||-50.5||-14.0||1.8||6.9||5.3||9.7|
|Altamira Equity||Canadian Focused Equity||406.3||2.63||-33.7||-8.6||1.0||1.7||3.1||9.2|
|Bissett Canadian Equity-F||Canadian Equity||182.7||1.25||-31.8||-11.4||-0.2||3.7||7.2||8.4|
|IA Clarington Cdn Conservative Eqty||Canadian Equity||204.5||2.39||-19.5||-6.7||2.5||5.8||8.7||8.3|
|Saxon Stock Fund-IS||Canadian Equity||236.5||1.86||-34.4||-11.6||-1.1||6.4||7.5||8.1|
|Dynamic Value Fund of Canada||Canadian Focused Equity||840.6||2.43||-27.4||-4.9||8.1||8.2||6.0||8.0|
|AGF Canadian Large Cap Div-Classic||Canadian Focused Equity||2,053.5||1.80||-30.7||-8.0||2.7||3.8||6.9||7.7|
|Teachers' RSP-Equity Section*||Canadian Equity||6.8||1.00||-44.8||-16.5||-6.0||2.2||6.1||7.6|
|AIC Advantage||Canadian Focused Equity||385.3||2.42||-48.8||-19.5||-8.1||-4.5||3.8||7.5|
|FÉRIQUE Equity**||Canadian Equity||248.7||0.83||-29.7||-6.3||2.2||5.6||7.2||7.4|
|CI Canadian Investment||Canadian Focused Equity||3,519.7||2.25||-28.8||-8.9||2.2||6.2||8.1||7.2|
|PH&N Canadian Equity-D||Canadian Equity||671.2||1.12||-34.1||-9.8||0.2||4.9||6.7||7.2|
|Dynamic Dividend Value||Canadian Focused Equity||347.7||1.59||-31.4||-9.4||1.9||4.8||6.5||7.1|
|GGOF Canadian Equity Fund Ltd. Mut||Canadian Equity||38.8||2.48||-28.1||-7.4||2.4||6.1||5.7||7.0|
|Dynamic Canadian Dividend Fund||Canadian Focused Equity||794.3||2.43||-31.9||-10.0||2.1||5.3||6.4||7.0|
|Worst 15 Canadian stock funds over 20 years|
|Mackenzie Growth||Canadian Focused Equity||210.3||2.38||-56.6||-23.9||-9.5||0.1||-0.2||1.2|
|Desjardins Canadian Equity||Canadian Equity||363.5||2.19||-33.7||-10.8||-0.4||0.7||2.6||3.6|
|IA Clarington Canadian Growth||Canadian Equity||27.4||2.46||-40.5||-13.4||-3.9||-0.9||1.8||3.6|
|Tmpltn Canadian Stock||Canadian Equity||107.1||2.55||-29.9||-12.1||-5.0||1.2||3.2||3.7|
|CIBC Canadian Equity||Canadian Equity||342.5||2.20||-35.6||-11.2||-1.7||1.0||3.1||3.8|
|Mackenzie Maxxum Canadian Value||Canadian Focused Equity||146.2||2.35||-30.3||-11.4||-3.3||1.1||3.0||3.9|
|Renaissance Canadian Growth||Canadian Focused Equity||154.5||2.48||-34.4||-10.0||-1.6||0.4||4.2||4.3|
|Investors Retirement Gwth. Port.-C||Canadian Focused Equity||668.9||2.99||-36.5||-13.0||-1.5||1.7||3.3||4.4|
|Investors Cdn Large Cap Value-C||Canadian Focused Equity||1,699.9||2.84||-36.5||-13.4||-0.9||3.1||3.8||4.5|
|Investors Canadian Equity-C||Canadian Focused Equity||1,770.0||2.84||-39.5||-15.0||-2.3||1.5||2.6||4.7|
|Investors Summa SRI FundTM C||Canadian Focused Equity||837.8||2.84||-45.2||-16.7||-6.3||-0.5||3.7||4.8|
|Ethical Growth||Canadian Focused Equity||251.8||2.30||-30.8||-8.9||-0.3||0.1||3.5||4.8|
|National Bank Canadian Equity||Canadian Equity||313.6||2.30||-29.2||-8.5||-0.9||2.4||3.8||4.8|
|Scotia Canadian Blue Chip||Canadian Focused Equity||251.9||2.09||-30.4||-8.4||0.8||3.4||3.6||4.9|
|Trimark Canadian Endeavour||Canadian Focused Equity||659.6||2.13||-39.3||-15.8||-6.5||2.3||2.9||4.9|
|S&P/TSX Total Return||-31.8||-7.6||2.8||4.6||6.5||7.0|
|S&P/TSX composite index||-33.9||-10.0||0.4||2.6||4.4||4.5|
*For teachers only; **For Quebec engineers and their family
© 2007 The Globe and Mail. All rights reserved.
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