WHAT ARE WE LOOKING FOR?
Index beaters among Canadian equity funds this year.
Given the wild swings of the past few months, let's see how managers are doing. Admittedly, the jury is still out as to whether they can end this year ahead of their benchmark.
We screened all Canadian equity funds - ones that must stick to domestic stocks - to find funds that beat the 17.2-per-cent gain by the S&P/TSX Total Return Index at May 31.
Segregated funds, pool and duplicate funds were excluded. We added longer-term returns to see how they have fared.
WHAT DID WE FIND?
The $11-million Van Arbor Canadian Advantage Fund was well ahead of the pack, beating the index with its 65-per-cent gain. Specialty exchange-traded funds (ETFs) and index funds also outperformed the benchmark.
The recent gain for Van Arbor Canadian Advantage, which is sold to accredited investors, has also helped boost its longer-term record. The value-oriented fund now has a 15-per-cent average annual return over five years - well above the 7-per-cent gain for the S&P/TSX Total Return.
The recent strong performance comes from a rebound in beaten-up resource stocks that make up more than half of the fund, says manager Andrew Parkinson.
Some of the fund's biggest winners this year include Teck Resources Ltd., Petrobank Energy and Resources Ltd. and Cameco Corp., he said.
The manager has been moving into oil service stocks as they have become more attractive than energy producers now that the price of crude oil has doubled to the $70 (U.S.)-a-barrel level.
The energy companies are "willing to spend money - not so much to drill - but to maintain, and make sure the fields they have today are producing as optimally as they can," he said.
While he is not sure whether the recent market rally is a bounce in a bear market, he is not convinced it is the start of another bull run either.
"We could have another test [of the lows] but I don't think it is going to be as severe as the last one," he said.
Specialty index funds, which beat the benchmark, include a version of the S&P/TSX 60 Index. These funds screen stocks using certain environmental, social and other criteria. The iShares CDN Jantzi Social Index ETF and Meritas Jantzi Social Index mutual fund, respectively, gained 22.4 per cent and 21.1 per cent.
The Claymore Canadian Fundamental ETF and Pro FTSE RAFI Canadian Index mutual fund, respectively, climbed 20.9 and 19.7 per cent. Both funds are designed to replicate the FTSE RAFI Canada Index, whose stock weightings are not determined by market value, but by factors like dividends and free cash flow.
|How Canadian equity funds have fared this year to May 31|
|(As of May '09)||Latest||(June 18)||% returns (as of May 31, 2009)|
|Fund name||Assets ($-mil)||MER||YTD % rtn||YTD||1-yr||3-yr||5-yr||10-yr||15-yr|
|Van Arbor Canadian Advantage||11.0||2.00||64.7||12.2||5.3||14.9|
|BonaVista Canadian Equity Value-D||9.5||1.25||22.3||23.2||-28.8|
|iShares CDN Jantzi Social Index||18.2||0.50||19.6||22.4||-27.1|
|Acker Finley Select Canada Focus-A||24.7||1.83||20.4||22.2||-35.0||-9.4||2.7|
|ScotiaMcLeod Cdn Core Port||24.4||2.05||19.0||21.8||-21.3||-1.1||0.2|
|Meritas Jantzi Social Index||66.5||1.94||19.2||21.1||-28.0||-2.6||4.6|
|Claymore Cdn Fundamental Index ETF||78.0||0.65||20.7||20.9||-19.7||0.1|
|Manulife Sector Rotation Fund||86.7||2.67||16.5||20.4||-24.8||-0.3||6.2||6.5|
|EdgePoint Canadian Portfolio FE*||20.7||19.9|
|Emissary Canadian Equity||31.0||2.78||17.5||19.9||-30.5||-7.1||3.5|
|Acker Finley Canada Focus||5.4||3.73||17.8||19.9||-36.5||-11.4||0.9|
|Fidelity Canadian Eq Priv Pool-B||7.5||16.7||19.8|
|Pro FTSE RAFI Canadian Index-A||8.0||1.60||19.4||19.7||-20.0|
|Manulife Canadian Value Class||19.4||2.44||17.6||19.5||-23.5||-5.1||4.0|
|TD Canadian Value||618.1||2.07||18.8||19.3||-29.3||-5.6||2.9||4.7||6.8|
|Quebec Professionals Cdn. Eqt||1.04||16.3||19.3||-27.8||-2.8||4.2||6.4||7.9|
|Fidelity Cdn Disciplined Equity-A||493.9||2.40||16.3||19.1||-29.4||-1.7||6.4||8.7|
|IG FI Canadian Equity-C||504.0||2.84||16.2||19.1||-29.9||-2.3||5.6|
|Manulife Canadian Value Fund||292.5||2.39||17.0||18.9||-23.9||-4.9||3.8||3.5|
|PH&N Community Values Cdn Equ-D||24.8||1.35||17.8||18.8||-24.4||-2.1||4.9|
|Integra Canadian Value Growth||155.0||1.23||15.2||18.6||-25.9||-2.7||4.2||5.5|
|DFA Canadian Core Equity A||1.47||16.6||18.5||-25.4||-3.2|
|iShares CDN LargeCap 60 Index||9,254.1||0.17||14.0||18.1||-25.7||1.8||9.1|
|Altamira Canadian Index||157.3||0.54||14.7||18.1||-26.0||0.7||8.2||6.6|
|Quotential Canadian Growth Pt||35.9||2.61||17.6||18.0||-29.8||-7.0|
|Omega Canadian Equity||210.9||2.18||13.4||18.0||-27.9||0.3||7.2|
|Desjardins Canadian Equity||452.1||2.19||15.8||17.9||-28.1||-4.4||3.9||2.8||4.5|
|IA Clarington Canadian Equity||150.6||2.72||15.3||17.9||-25.6||-2.2||3.2||6.0|
|Fidelity True North-A||709.9||2.39||13.3||17.8||-28.0||0.1||7.0||7.4|
|Bissett All Cdn Focus F||3.8||1.48||17.3||17.8||-32.6||-2.5|
|JOV Prosperity Canadian Equity A||1.4||16.3||17.6||-25.6|
|Standard Life Cdn Equity Focus-L||3.0||1.16||15.3||17.4||-29.9||-3.6|
|SEI Canadian Equity-O||2,143.7||0.13||16.3||17.4||-29.2||-1.2||7.3||9.2|
|McLean Budden Canadian Equity D||15.9||1.25||15.7||17.3||-22.6||-0.8||5.1|
|Sceptre Canadian Equity-O||117.4||14.3||17.3||-28.6||-0.4||9.4|
|S&P/TSX Composite Index||12.6||15.4||-29.5||-4.1||4.3||4.2||6.0|
|S&P/TSX Total Return||14.5||17.2||-27.0||-1.3||6.9||6.4||8.2|
|Source: Globe Investor, companies|
© 2007 The Globe and Mail. All rights reserved.
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