What We're Looking For
Duds in the Canadian equity fund categories.
The point of taking on risk in investing is that you put yourself in position to reap better returns than you'd get from keeping your money safe. Like, say, in money market funds, where your money isn't guaranteed but remains insulated from stock and bond market volatility. By this logic, a dud equity fund would be one that makes you less over the long term than the average Canadian money market fund.
What follows is a list of the biggest funds in the Canadian equity categories with returns that were equal to or less than the average money market fund over the 10 years to July 31, which was 2.6 per cent. To show how a fund is doing lately, we have also included quartile rankings for the past 12 months. Quartiles divide funds in a category into four groups according to their returns - first quartile is best, fourth is worst.
What We Found
Some names you might expect, like AIC Advantage, and some you probably wouldn't expect, like PH&N Growth. Once a high flier, AIC Advantage was loaded with the kind of financial stocks that were annihilated in 2007-08. The fund has surged lately thanks to rebounding bank stocks, but an investment in it over the past decade was essentially dead money.
PH&N Canadian Growth is supposed to be a Canadian equity fund you can buy and forget because of its conservative management and low fees. But the fund's 10-year return of 2.6 per cent is well below the peer average of 4.9 per cent over the past decade (the S&P/TSX composite made 6.5 per cent). Also, the fund lost 38.3 per cent in 2008, which is just over 7.5 percentage points worse than average.
Mackenzie Ivy Canadian is an interesting case because it's a conservatively run fund that protects investors laudably well in down markets - down 15.8 per cent last year - but lies there like a plate of warm beer when stocks are rising fast.
|Canadian equity funds that have done worse over the past 10 years than the average Canadian Money Market fund|
|(ranked by largest assets)|
|(As of July 31/09)||Latest||(July 31)||1-yr|
|Fund name||Category Assets ($-mil)||MER||10-yr % rtn||Quartile|
|Mackenzie Ivy Canadian||Canadian Focused Equity||1846.1||2.38||2.4%||2|
|Investors Summa SRI FundTM C||Canadian Focused Equity||1122.3||2.85||1.9%||4|
|AIC Diversified Canada||Canadian Focused Equity||662.1||2.46||1.8%||3|
|AIC Advantage||Canadian Focused Equity||525.2||2.42||0.2%||2|
|CI Canadian Small/Mid Cap||Canadian Small or Mid Cap Equity||442.3||2.31||1.5%||3|
|CIBC Canadian Equity||Canadian Equity||399.3||2.21||2.5%||3|
|AIC Advantage II||Canadian Focused Equity||332.1||2.68||-0.3%||2|
|MD Select||Canadian Equity||300.6||1.47||2.2%||4|
|Mackenzie Growth||Canadian Focused Equity||296.0||2.40||2.5%||4|
|Ethical Growth||Canadian Focused Equity||294.4||2.30||1.7%||3|
|CIBC Canadian Equity Value||Canadian Equity||237.4||2.01||1.9%||1|
|Desjardins Canadian Small Cap Equ||Canadian Small or Mid Cap Equity||196.6||2.19||2.0%||4|
|AGF Canadian Small Cap||Canadian Small or Mid Cap Equity||192.7||2.71||0.2%||4|
|PH&N Canadian Growth-D||Canadian Focused Equity||187.7||1.18||2.6%||3|
|Renaissance Canadian Growth||Canadian Focused Equity||182.5||2.49||2.5%||3|
|AGF Canadian Value||Canadian Focused Equity||154.1||2.38||0.8%||1|
|Investors Retirement High Gwth Po-C||Canadian Focused Equity||122.4||3.00||1.4%||2|
|Investors Cdn Small Cap Growth-C||Canadian Focused Small/Mid Cap Equity||116.5||2.85||-1.9%||4|
|Tradex Equity Fund Limited||Canadian Focused Equity||79.2||1.28||2.5%||4|
|Acuity Clean Environment Equity||Canadian Focused Small/Mid Cap Equity||77.6||2.92||-0.3%||4|
|ABC Fully-Managed||Canadian Focused Small/Mid Cap Equity||75.6||2.00||2.1%||4|
|PH&N Vintage-D||Canadian Focused Small/Mid Cap Equity||46.5||1.79||1.4%||4|
|Natcan QSSP II Investment Fund Inc.||Canadian Small or Mid Cap Equity||45.0||3.39||-1.7%||1|
|Stone & Co. Flagship Stock B||Canadian Focused Equity||25.8||3.29||2.6%||4|
|Mavrix Sierra Equity||Canadian Focused Small/Mid Cap Equity||4.6||2.93||-3.7%||4|
|Sceptre Global Equity-A||Global Equity||4.6||2.61||-7.0%||4|
|Caldwell Canada||Canadian Small or Mid Cap Equity||3.0||2.75||-5.1%||4|
|Mackenzie STAR Cdn Max Equ Growth||Canadian Focused Equity||2.2||2.65||0.1%||3|
|Mavrix Canadian Growth||Canadian Small or Mid Cap Equity||1.6||3.25||-20.9%||4|
|Fairlane Growth||Canadian Small or Mid Cap Equity||0.9%||4|
© 2007 The Globe and Mail. All rights reserved.
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