What We're Looking At
Today begins a week-long Cruncher look at how the mutual funds that were massacred last year have done in 2009. We start with Canadian equity funds.
Funds in the Canadian equity and Canadian focused equity categories with assets of $25-million or more were ranked according to the size of their losses in 2008. To see how each fund has rebounded, we've displayed the return for the year through Nov. 26.
For a longer-term view on the performance of these funds, we have included five-year quartile numbers. Quartiles divide funds in a category into four groups - first quartile is best, fourth is worst.
What We Found
While many of the worst funds of 2008 have rebounded nicely in 2009, their five-year quartile numbers still look weak in some cases. This suggests a lesson for choosing funds. If a fund leads its category on the down side in a particular year, it's a sign of volatility that may not suit a lot of investors and may undercut long-term gains.
Let's take Mackenzie Growth as an example. It led all Canadian equity funds on our chart last year with a loss of 59.9 per cent. In other words, $1,000 invested in the fund on Jan. 1 was turned into $401. So far in 2009, the fund has been almost as strong up the upside as it was on the down last year. Impressive resilience, for sure, but a scary ride, too. It's worth noting that over the past five years, this fund ranks in the fourth quartile.
In some cases, holding a volatile fund may work out over the long term. Take TD Canadian Equity and Dynamic Power Canadian Growth, for example. Both did the see-saw thing last year and in 2009, but their five-year returns are among the elite. Still, it takes a steady investor to hang on through the ups and down with these funds.
One further note: $100 invested in a fund that loses 50 per cent in a year and then gains back 50 per cent in the following year would be worth $75.
It's harder to recoup your losses than it is to make money in the first place.
|Canadian Equity Funds as of Nov. 26, 2009|
|Assets ($-mil)||Latest||% rtn||% rtn||Quartile|
|Fund name (as of Oct. 31)||MER||2008||Nov. 26||Oct. 31||Category|
|Mackenzie Growth||307.4||2.40||-59.9||57.5||4||Canadian Focused Equity|
|AIC Advantage II||320.4||2.68||-51.4||39.4||4||Canadian Focused Equity|
|Dynamic Power Canadian Growth||1,631.6||2.40||-51.4||50.1||1||Canadian Focused Equity|
|AIC Advantage||513.5||2.42||-51.1||39.9||4||Canadian Focused Equity|
|Investors Summa SRI Fund C||1,147.8||2.85||-49.7||45.1||4||Canadian Focused Equity|
|Acuity Social Values Canadian Equ||38.3||2.95||-46.3||41.4||3||Canadian Focused Equity|
|Acker Finley Select Canada Focus-A||27.4||1.83||-44.1||37.6||4||Canadian Equity|
|Norrep Q Class-A||-44.0||27.1||3||Canadian Equity|
|Acuity Canadian Equity||60.7||2.95||-43.7||44.7||2||Canadian Focused Equity|
|TD Canadian Equity||2,786.7||2.07||-42.2||42.8||1||Canadian Focused Equity|
|Manulife Canadian Core Fund||244.1||2.39||-41.4||22.3||4||Canadian Equity|
|imaxx Canadian Equity Growth||25.3||2.68||-40.3||26.7||2||Canadian Equity|
|Investors Canadian Equity-C||2,295.5||2.85||-39.9||33.2||3||Canadian Focused Equity|
|Manulife Canadian Equity Fund-A||365.8||2.35||-39.8||28.8||2||Canadian Focused Equity|
|Quotential Canadian Growth Pt||42.4||2.65||-39.3||34.6||4||Canadian Equity|
|MD Select||331.8||1.47||-39.2||35.0||4||Canadian Equity|
|iShares CDN Completion Index||137.2||0.55||-38.8||39.1||2||Canadian Equity|
|Tradex Equity Fund Limited||80.8||1.28||-38.3||28.4||4||Canadian Focused Equity|
|PH&N Canadian Growth-D||184.2||1.18||-38.3||29.4||4||Canadian Focused Equity|
|Scotia Canadian Growth||396.2||2.15||-38.2||26.6||3||Canadian Focused Equity|
|Investors Retirement High Gwth Po-C||123.8||3.00||-38.2||37.5||3||Canadian Focused Equity|
|TD Canadian Value||652.1||2.07||-37.9||37.9||3||Canadian Equity|
|CIBC Canadian Equity||386.6||2.31||-37.9||24.8||4||Canadian Equity|
|RBC O'Shaughnessy Canadian Equity||1,096.0||1.47||-37.3||20.5||3||Canadian Focused Equity|
|Fidelity Canadian Growth Company-A||158.7||2.47||-37.3||20.0||3||Canadian Focused Equity|
|Desjardins Canadian Equity Value||586.6||2.41||-36.7||31.6||3||Canadian Equity|
|Trimark Canadian Endeavour||831.9||2.10||-36.6||35.5||4||Canadian Focused Equity|
|Source: Globe Investor|
© 2007 The Globe and Mail. All rights reserved.
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