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Mutual Fund News

Holding true to their convictions pays off

swon@globeandmail.com

WHAT ARE WE LOOKING FOR?

Biggest movers among Canadian stock funds since the market bottom in March.

Canadian equity markets have staged a stunning recovery amid expectations of a global economy recovery. But the jury is still out as to whether the rebound is really a bull or bear market rally.

TODAY'S SEARCH

We screened for the best 30 performers among Canadian equity, Canadian focused equity, and Canadian dividend and income funds from March 9 to Sept. 24. We also looked at the year-to-date gains to this past Thursday, and returns in 2008 when the stock market crashed. Pooled, segregated, U.S. dollar and duplicate versions were excluded, as well as funds that were not valued on Thursday.

WHAT DID WE FIND?

Having the guts to invest when the market is at its depressing lows can payoff.

While active managers often have a tough time beating the market, the top 30 gainers also handily surpassed the S&P/TSX composite total return of 52 per cent since March 9.

Top movers included Investors Canadian Large Cap Value, which surged 85 per cent; Trimark Canadian Endeavour, 84 per cent, and AGF Canadian Value, 81 per cent.

Trimark Canadian Endeavour is a Canadian-focused equity fund that is almost 50 per cent invested in foreign stocks. The value-oriented, high-conviction fund owns 29 stocks, including 14 Canadian names.

The fund's big gain stems from sticking with companies whose stocks got beaten up in 2008, and buying more of their shares at cheaper prices, says Clayton Zacharias, who has run Trimark Canadian Endeavour since late 2007. "We stayed the course, and didn't panic."

The names that got battered were also the names "that have had the big recovery from very low levels," he says.

Some of the biggest winners included foreign stocks like specialty mattress maker Tempur-Pedic International Inc. and building materials manufacturer Kingspan Group PLC. Canadian names like conglomerate Power Corp. of Canada and Newalta Inc., an industrial waste management company, also contributed to gains.

Mr. Zacharias says it would not be unreasonable to see "some kind of correction" in the stock market after the runup. "Because people worry about a correction, that could be self-fulfilling," he says.

"At the same time, there is still a lot of cash sitting on the sidelines that needs to be put to work in the market because it is earning zero per cent today. So, there are two different forces at work."

How Canadian stock funds have fared since the March lows
(Period Returns %)(As of Aug. 31, 2009 %)
NameAssets ($ mil)MER % Mar 9-Sept. 24 YTD Sept. 2420081YR3YR5YR10YR15YR
Investors Cdn Large Cap Value-C2504.92.858454.8 54.6 -35.5 -3.8 0.3 8.1 7.3 6.9
Trimark Canadian Endeavour845.12.1083.5 36.9 -36.6 -9.5 -6.9 -0.4 4.3 5.2
AGF Canadian Value160.02.3880.7 32.1 -32.2 -8.0 -2.4 3.4 1.5 3.3
AIC Advantage522.42.4276.5 36.1 -51.1 -19.6 -11.1 -0.4 0.7 8.0
AIC Advantage II329.72.6876.2 35.3 -51.4 -20.4 -11.5 -0.9 0.3
Investors Summa SRI FundTM C1143.62.8573.2 46.6 -49.7 -24.4 -6.2 1.0 2.2 6.7
iShares CDN Value Index39.10.5072.6 36.3 -34.0 -12.7
Fidelity Canadian Opportunities-A159.52.4972.6 45.4 -36.6 -6.8 1.0 7.1
Dynamic Power Canadian Growth1607.34.0971.3 45.7 -51.4 -28.6 -0.9 10.8 10.1 8.7
Mackenzie Growth292.72.4070.9 51.9 -59.9 -28.8 -13.3 -3.2 2.3 2.2
Investors Retirement Gwth. Port.-C947.93.0169.7 42.4 -35.6 -9.8 -1.7 6.1 5.2 5.9
Claymore Cdn Fundamental Index ETF68.168.1 38.3 -31.6 -4.7 2.5
ScotiaMcLeod Cdn Core Port26.62.0566.2 35.6 -33.1 -11.3 0.1 1.9
Pro FTSE RAFI Canadian Index-A65.4 36.3 -31.8 -5.4
TD Canadian Value675.02.0765.2 35.7 -37.9 -15.1 -3.4 5.0 5.7 7.6
Bissett Canadian Equity-F229.21.3764.8 32.6 -32.6 -10.0 -1.5 5.4 7.0 9.8
VPI Cardinal Canadian Equity Pool167.62.1664.8 29.8 -30.8 -8.1 -0.4
DMP Power Canadian Growth Class11.22.6164.3 43.3 -46.3 -23.5 2.1
IG Bissett Canadian Equity C145.92.8562.8 29.0 -33.2 -11.8 -3.1
Claymore Dividend & Income ETF69.80.6062.6 26.6 -30.4 -13.5
BonaVista Canadian Equity Value-D10.81.2562.4 37.1 -38.4 -16.1 -2.6
iShares CDN Dividend Index450.30.5062.2 29.1 -30.9 -7.7 -0.8
TD Canadian Equity2542.02.0761.5 38.5 -42.2 -26.2 -2.2 7.7 6.6 8.9
Investors Retirement High Gwth Po-C123.53.0061.3 37.5 -38.2 -15.2 -4.5 3.2 1.6
Mackenzie Saxon Stock Fund-SI291.22.0060.8 30.0 -32.8 -11.4 -1.7 5.0 8.5 10.2
Trimark Canadian-SC588.41.6560.4 28.1 -27.5 -10.4 -4.2 1.6 3.8 5.7
Dynamic Canadian Value Class521.62.4860.1 38.2 -28.0 -13.2 0.4 12.7
Acker Finley Select Canada Focus-A27.31.8359.6 33.7 -44.1 -24.0 -8.2 3.2
Tmpltn Canadian Stock130.52.5558.9 30.8 -30.1 -10.1 -2.3 1.3 3.0 5.3
JOV Prosperity Canadian Equity I0.258.4 32.4 -12.0
S&P/TSX Composite Index49.1 25.6 -35.0 -21.1 -3.4 5.3 4.5 6.3
S&P/TSX Total Return51.8 28.7 -33.0 -18.2 -0.6 8.0 6.7 8.5
Source: Globe Investor

© 2007 The Globe and Mail. All rights reserved.

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