WHAT ARE WE LOOKING FOR?
Actively managed funds rising to the top of the heap for the first five months of 2009.
It's been a wild ride in the stock markets with steep corrections followed by a sharp rebound lately. And the jury is out as to whether the rally is a bounce in bear market or a simmering bull.
We screened all investments for the top 30 performers. We excluded index and exchange-traded funds, as well as U.S. dollar and duplicate funds.
WHAT DID WE FIND?
A triple-digit gain. And mostly resource funds or ones heavy with commodity stocks - a sector battered in last year's market collapse.
Mavrix Explorer, a natural resources mutual fund, was the star with an eye-popping 106-per-cent return that easily erases memories of last year's depressing 67-per-cent loss.
Its winners this year have included Teck Cominco Ltd., Capstone Mining Corp., Petrobank Energy and Resources Ltd., and Breakwater Resources Ltd.
The fund benefited from a recovery in resource stocks from "ridiculous lows" during the market meltdown, and rising commodity prices fuelled largely by China's infrastructure spending, manager Paul MacDonald said.
Rising commodity prices are sustainable with "bumps along the road," while an increase in base metals and natural gas prices are expected near the end of the year, he said.
Salida Multi-Strategy Hedge was also a top performer, and led the pack among alternative strategy funds with its robust 70.6-per-cent return. It's a major comeback from last year's steep 67-per-cent loss.
The fund - which can invest anywhere in the world and has a commodity bias - saw its biggest gains this year come from corporate bonds as well as energy and gold stocks, manager Brad White said.
"The combined rise in commodity and equity prices has been quite powerful," Mr. White said. "And the tightening of credit spreads helped us with the bond portfolio."
The next area for opportunities is further consolidation in the resource sector by China, he said. "The fund is positioned for attempted Chinese takeovers in sectors like base metals, oil and agriculture."
This investment theme gained momentum with Rio Tinto's decision this week to walk away from a proposed $19.5-billion (U.S.) deal that would have given the Chinese government an 18-per-cent stake in the mining giant, he said. Rio Tinto has turned to rival BHP Billiton to combine their iron ore assets in a joint venture.
The Chinese are poised to buy more hard assets, and that trend is expected to continue for the next three to five years, Mr. White suggested.
|Best Performers for the first five months of 2009|
|(As of Apr 30)||Latest||(May 31)||Annual % returns|
|Fund name||Asset Class Assets ($-mil)||MER||YTD % rtn||2008||2007||2006||2005||2004|
|Mavrix Explorer||Natural Res. Equity||3.7||2.91||106.4||-67.1||8.1||9.8||-12.5||4.1|
|Sentry Select Mining Opportunity Cl||Precious Metals Equity||21.2||2.78||81.9||-69.8||10.0|
|Salida Multi-Strategy Hedge||Alternative Strategies||56.0||70.6||-66.5||35.8||87.4||34.3|
|Investors Cdn. Natural Resource-C||Natural Res. Equity||430.9||2.85||65.2||-49.7||3.7||3.7||52.3||11.9|
|Van Arbor Canadian Advantage||Miscellaneous||2.00||64.7||-36.1||6.6||8.6||35.4|
|Front Street Canadian Energy||Alternative Strategies||25.3||58.5||-67.7||18.2||56.8|
|Marquest Resource||Natural Res. Equity||57.3||-52.3||65.2||39.0||11.9||9.8|
|Sprott Gold and Precious Minerals||Precious Metals Equity||301.0||2.84||54.6||-49.6||-16.4||56.2||16.3||-18.8|
|Redwood Global Small Cap||Glob Sml/Md Cp Equity||2.18||53.6|
|Dynamic FocusPlus Resource||Natural Res. Equity||295.5||2.39||53.5||-50.7||14.3||58.7||34.9||19.4|
|Arrow U.S. Equity Income||Alternative Strategies||28.7||49.5||-66.2|
|Dynamic Power Hedge Fund-F||Alternative Strategies||244.0||2.52||49.2||-71.8||38.6||71.5||73.0||24.9|
|Front Street Special Opp Canadian-B||Natural Res. Equity||87.2||2.82||48.9||-46.3||8.0||22.5||46.8||19.3|
|Dynamic Contrarian||Alternative Strategies||85.8||2.70||48.5||-59.1||0.6||50.4|
|Front Street Growth-B||Cdn Sml/Md Cp Equity||68.2||2.73||47.7||-53.5||-1.3||20.7||47.4||24.3|
|Ark Catapult Energy Class Series A||Natural Res. Equity||2.7||45.3|
|Arrow Enso Global||Alternative Strategies||22.9||45.2||-44.1||12.5||13.3||8.7||8.5|
|FrontierAlt Resource Capital Cl-A||Natural Res. Equity||4.9||44.6||-72.7|
|AlphaNorth Partners Fund Inc.||Alternative Strategies||10.6||44.6||-53.3|
|Mackenzie Univ Wld Resource Class||Natural Res. Equity||99.5||2.46||43.4||-62.1||32.3||23.6||27.3||22.8|
|Quadrus Mac Focus Canada-D8||Cdn Focused Equity||0.0||43.4|
|Sentry Select Precious Metals Grwth||Precious Metals Equity||212.0||2.66||43.3||-37.1||9.7||74.0||35.3||-11.3|
|Renaissance China Plus||Greater China Equity||110.8||3.20||43.1||-37.0||28.6||51.8||-3.2||-5.0|
|Acuity All Cap 30 Canadian Equity||Cdn Focused Equity||219.4||2.91||41.8||-57.7||13.6||26.2||10.1||21.3|
|Raymond James Canadian Focus Picks||Cdn Sml/Md Cp Equity||0.9||6.47||40.9|
|Mackenzie Univ Wld Prec Metal Class||Precious Metals Equity||66.0||2.51||40.2||-45.0||7.6||53.8||30.1||-19.4|
|Mackenzie Univ Precious Metals||Precious Metals Equity||320.8||2.42||39.5||-46.1||6.6||49.2||26.8||-20.5|
|Front Street Small Cap-A||Cdn Sml/Md Cp Equity||0.9||2.50||39.4||16.3|
|Standard Life India Equity Focus A||Miscellaneous||3.9||39.2|
|DMP Resource Class||Natural Res. Equity||115.7||2.67||38.4||-57.2||-5.1||44.3||40.4||7.5|
|BMO Nesbitt Burns Cdn Small Cap Index||27.5||-46.6||2.0||16.6||19.7||14.1|
|MSCI World ($ Cdn)||4.5||-26.1||-7.1||20.6||6.6||7.3|
|S&P 500 Composite||1.8||-38.5||3.5||13.6||3.0||9.0|
|S&P/TSX Composite Index||15.4||-35.0||7.2||14.5||21.9||12.5|
|Source: Globe Investor|
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