WHAT ARE WE LOOKING FOR?
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.
WHAT DID WE FIND?
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 name||Category Assets ($-mil)||MER||YTD||5-yr||2008||2007||2006||2005||2004|
|Salida Multi-Strategy Hedge||Alternative Strategies||94.0||n/a*||142.3||27.6||-66.5||35.8||87.4||34.3||n/a|
|Dynamic Power Hedge Fund-F||Alternative Strategies||506.3||11.39**||135.6||26.0||-71.8||38.6||71.5||73.0||24.9|
|Peregrine Investment Mgmt Fund L.P.||Alternative Strategies||27.2||n/a||69.5||24.6||-30.0||12.2||35.8||39.7||n/a|
|CI Global Opportunities***||Alternative Strategies||22.2||2.85||-1.9||24.3||42.6||109.4||-3.0||0.9||-5.7|
|CI Trident Global Opportunities||Alternative Strategies||253.7||2.87||-1.8||23.2||43.6||89.0||0.1||5.7||1.1|
|Sentry Select Precious Metals Grwth||Precious Metals Equity||292.7||2.75||56.6||21.6||-37.1||9.7||74.0||35.3||-11.3|
|Tera Capital Global Innovation||Science & Tech. Equity||10.0||4.48||15.3||21.3||-40.5||12.1||47.4||84.1||33.1|
|TD Latin American Growth||Miscellaneous||217.8||2.73||57.5||20.9||-44.0||17.4||47.3||46.5||31.8|
|Front Street Special Opp Canadian-B||Natural Res. Equity||162.9||2.82||116.0||20.6||-46.3||8.0||22.5||46.8||19.3|
|Fidelity Latin America-A||Miscellaneous||37.2||2.65||49.3||20.5||-41.9||18.0||43.8||48.4||28.8|
|Dynamic FocusPlus Resource||Natural Res. Equity||501.5||2.66||95.2||20.1||-50.7||14.3||58.7||34.9||19.4|
|Marquest Resource||Natural Res. Equity||n/a||n/a||41.0||18.8||-52.3||65.2||39.0||11.9||9.8|
|PH&N Absolute Return||Alternative Strategies||153.3||1.42||45.1||18.7||1.5||18.2||21.2||10.6||3.8|
|AGF Emerging Markets||Emerging Mrkts Equity||724.2||2.83||50.1||18.3||-35.2||12.4||40.4||35.3||16.6|
|AGF Global Resources Class||Natural Res. Equity||144.0||3.01||48.8||17.9||-31.4||16.4||31.0||36.6||22.2|
|Axis Investment Funds Inc. Ser. I||Retail Venture Capital||2.8||6.78||-28.5||-28.6||-61.0||-18.5||-13.0||-6.0||-5.6|
|VenGrowth Invst Fund Inc. Cl A SrE||Retail Venture Capital||24.9||4.17||-30.6||-16.9||-37.0||-9.6||6.1||-3.9||-10.5|
|DeltaOne Strategic Energy||Alternative Strategies||n/a||n/a||-11.2||-16.6||-76.5||1.3||-30.5||120.4||-5.0|
|Advantage Growth||Retail Venture Capital||n/a||7.53||-2.3||-14.2||-31.6||-14.2||-15.8||-3.6||0.0|
|Lawrence Enterprise I||Retail Venture Capital||n/a||6.40||-22.9||-13.1||-25.5||8.2||-13.9||-9.4||-5.4|
|Brandes U.S. Small Cap Equity||U.S. Sml/Mid Cap Eq.||17.6||2.57||39.9||-12.5||-49.6||-37.5||13.4||-12.8||9.2|
|Desjardins American Equity Growth||U.S. Equity||266.9||2.55||3.3||-12.4||-46.6||-21.5||5.1||0.7||n/a|
|Brandes U.S. Equity||U.S. Equity||41.8||2.57||12.2||-11.9||-46.0||-29.5||25.0||-9.5||3.8|
|Mavrix Canadian Growth||Cdn Sml/Mid Cap Eq.||1.7||3.48||3.9||-11.3||-68.1||1.3||35.6||8.4||-11.2|
|Creststreet Resource||Natural Res. Equity||n/a||3.44||42.1||-10.8||-67.4||10.5||-25.6||33.4||36.0|
|AIC Value||U.S. Equity||81.8||2.60||7.0||-10.7||-42.0||-28.6||22.6||-2.0||-1.0|
|CI Value Trust Corporate Class||U.S. Equity||287.9||2.58||14.9||-10.5||-46.6||-21.4||5.0||0.9||1.9|
|VenGrowth II Investment Fund Inc.||Retail Venture Capital||223.5||4.79||-11.6||-10.5||-24.1||-12.6||-2.4||-4.0||-5.1|
|New Generation Biotech Equity-II||Retail Venture Capital||n/a||5.44||-7.2||-10.2||-11.5||-6.1||-21.8||-6.4||n/a|
|AIC Global Advantage Corporate Cl||Financial Svcs Equity||3.3||2.92||25.4||-10.1||-57.3||-24.1||22.4||6.1||5.4|
|MSCI World ($ Cdn)||8.5||0.7||-26.1||-7.1||20.6||6.6||7.3|
|S&P 500 Composite ($ Cdn)||0.9||-4.1||-23.8||-12.2||13.6||-0.2||1.5|
|S&P/TSX Composite Index||21.4||4.2||-35.0||7.2||14.5||21.9||12.5|
|S&P/TSX Total Return||24.8||6.9||-33.0||9.8||17.3||24.1||14.5|
|* Salida will not release MER. **Dynamic Power Hedge includes performance fees. ***CI Global Opportunities closed to new investors. Source: Globe Investor, companies|
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