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Hedge funds on top in five-year snapshot


Leaders and laggards over the past five years.

Given that some managers may engage in a game of musical chairs between firms, five years is a decent period to look at long-term performance.

Keep in mind this is a snapshot in time, and includes what the industry describes as an "end-date bias." Current numbers also reflect the sharp rebound in stock markets from the dismal March lows.


We asked Victor Tan, a fund analyst at Globe Investor, to screen for the top and bottom 15 funds for the year ending Oct. 31. Segregated, U.S.-dollar and duplicate versions of funds were excluded.


Hedge funds rose to the top of heap among the leaders.

Salida Multi Strategy Hedge led by Brad White and Dynamic Power Hedge run by Rohit Sehgal have, respectively, posted average annual returns of nearly 28 per cent and 26 per cent over five years. While those are enviable numbers for these resource-oriented funds, investors also endured losses of 66 to 72 per cent last year. Triple-digit returns so far this year have helped them get back on track.

CI Global Opportunities and CI Trident Global Opportunities are also among the stellar performers, They have, respectively, posted average annual returns of 24 and 23 per cent. In sharp contrast, the CI funds run by Nandu Narayanan made nice money during last year's dismal market meltdown, but are barely breaking even so far this year.

The reason is that his portfolios reflect a bearish view. "The current bubble in the United States and by extension global, financial assets is almost certain to have a relatively short existence," Mr. Narayanan predicted in a recent market commentary. "A renewed slowdown will impose more serious strains on the U.S. government, and spell doom for the U.S. dollar and bond markets as well as levitating equity markets."

When it comes to the laggards, however, retail venture capital investments - commonly known as labour sponsored funds - topped this list. Tech-oriented Axis Investment Funds was the worst performer, posting an average annual loss of nearly 29 per cent over five years. VenGrowth Investment Funds I and II, respectively lost an average annual 17 per cent and 11 per cent over the same time. These funds halted redemptions last December, and are returning investors' money in the form of an annual distribution. Labour funds have had a tough time attracting new money because of Ontario's decision to phase out tax credits by the 2013 RRSP season. They invest mainly in private firms that have been difficult to sell or take public, particularly during last year's market collapse.


Top and Bottom 15 Funds as of Oct. 31, 2009
(As of Oct. 31)Latest% rtn (Oct. 31)% returns (calendar year)
Fund nameCategory Assets ($-mil)MERYTD5-yr20082007200620052004
Top 15
Salida Multi-Strategy HedgeAlternative Strategies94.0n/a*142.327.6-66.535.887.434.3n/a
Dynamic Power Hedge Fund-FAlternative Strategies506.311.39**135.626.0-71.838.671.573.024.9
Peregrine Investment Mgmt Fund L.P.Alternative Strategies27.2n/a69.524.6-
CI Global Opportunities***Alternative Strategies22.22.85-1.924.342.6109.4-3.00.9-5.7
CI Trident Global OpportunitiesAlternative Strategies253.72.87-1.823.243.689.
Sentry Select Precious Metals GrwthPrecious Metals Equity292.72.7556.621.6-37.19.774.035.3-11.3
Tera Capital Global InnovationScience & Tech. Equity10.04.4815.321.3-40.512.147.484.133.1
TD Latin American GrowthMiscellaneous217.82.7357.520.9-44.017.447.346.531.8
Front Street Special Opp Canadian-BNatural Res. Equity162.92.82116.020.6-
Fidelity Latin America-AMiscellaneous37.22.6549.320.5-41.918.043.848.428.8
Dynamic FocusPlus ResourceNatural Res. Equity501.52.6695.220.1-50.714.358.734.919.4
Marquest ResourceNatural Res. Equityn/an/a41.018.8-52.365.
PH&N Absolute ReturnAlternative Strategies153.31.4245.118.71.518.
AGF Emerging MarketsEmerging Mrkts Equity724.22.8350.118.3-35.212.440.435.316.6
AGF Global Resources ClassNatural Res. Equity144.03.0148.817.9-31.416.431.036.622.2
Bottom 15
Axis Investment Funds Inc. Ser. IRetail Venture Capital2.86.78-28.5-28.6-61.0-18.5-13.0-6.0-5.6
VenGrowth Invst Fund Inc. Cl A SrERetail Venture Capital24.94.17-30.6-16.9-37.0-9.66.1-3.9-10.5
DeltaOne Strategic EnergyAlternative Strategiesn/an/a-11.2-16.6-76.51.3-30.5120.4-5.0
Advantage GrowthRetail Venture Capitaln/a7.53-2.3-14.2-31.6-14.2-15.8-3.60.0
Lawrence Enterprise IRetail Venture Capitaln/a6.40-22.9-13.1-25.58.2-13.9-9.4-5.4
Brandes U.S. Small Cap EquityU.S. Sml/Mid Cap Eq.17.62.5739.9-12.5-49.6-37.513.4-12.89.2
Desjardins American Equity GrowthU.S. Equity266.92.553.3-12.4-46.6-
Brandes U.S. EquityU.S. Equity41.82.5712.2-11.9-46.0-29.525.0-9.53.8
Mavrix Canadian GrowthCdn Sml/Mid Cap Eq.1.73.483.9-11.3-68.11.335.68.4-11.2
Creststreet ResourceNatural Res. Equityn/a3.4442.1-10.8-67.410.5-25.633.436.0
AIC ValueU.S. Equity81.82.607.0-10.7-42.0-28.622.6-2.0-1.0
CI Value Trust Corporate ClassU.S. Equity287.92.5814.9-10.5-46.6-
VenGrowth II Investment Fund Inc.Retail Venture Capital223.54.79-11.6-10.5-24.1-12.6-2.4-4.0-5.1
New Generation Biotech Equity-IIRetail Venture Capitaln/a5.44-7.2-10.2-11.5-6.1-21.8-6.4n/a
AIC Global Advantage Corporate ClFinancial Svcs Equity3.32.9225.4-10.1-57.3-
MSCI World ($ Cdn)8.50.7-26.1-
S&P 500 Composite ($ Cdn)0.9-4.1-23.8-12.213.6-0.21.5
S&P/TSX Composite Index21.44.2-
S&P/TSX Total Return24.86.9-33.09.817.324.114.5
* Salida will not release MER. **Dynamic Power Hedge includes performance fees. ***CI Global Opportunities closed to new investors. Source: Globe Investor, companies

© 2007 The Globe and Mail. All rights reserved.

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