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Mutual Fund News

More than European funds lost money in early May

swon@globeandmail.com

What are we looking for?

Mutual funds that lost the most money in the first week of May.

Investors were spooked by Greece's debt woes and fears of contagion before a $1-trillion (U.S.) bailout package was announced last Monday. And then there was that eerie drop of nearly 10 per cent on May 6 by the Dow Jones industrial average before it pared losses to end down 3.2 per cent.

Today's search

We screened and ranked funds by the steepest losses from May 3 to May 7. Segregated, pooled, U.S. dollar, alternative strategy and duplicate versions were excluded.

What did we find?

Not surprisingly, European equity funds took it on the chin.

But tumbling markets also took the wind out of the sails of smaller-company and resource funds.

Among European stock funds, AGF European Equity Class, which is run by John Arnold and Rory Flynn, shed 12.9 per cent. Financial stocks got hit amid worries about Greece and other European countries potentially defaulting on their debt. This fund, which is fully invested, was nearly 50 per cent in financials at the end of April. The pair also run AGF International Stock Class, which lost 10.1 per cent. This fund was about 75 per cent invested in Europe with about 43 per cent allocated to financials.

Excel Emerging Europe, which was 72 per cent invested in Russia and Turkey at the end of March, fell 12.7 per cent even though it does not invest in Western European equities. "In the short term, equity markets from around the world can move together in the same direction," said Paul Mesburis, an executive with Excel Investment Counsel.

RBC O'Shaughnessy U.S. Growth, which is managed by James O'Shaughnessy, lost 11.2 per cent. The fund is also fully invested in smaller-capitalization stocks so there was no cash cushion to stem a downward slide.

The manager's stock selection process includes investing in companies with strong price momentum. "When you use momentum and have a volatile market ... you have seen us go down faster than the market, and come back twice as fast as the market," said Chris Loveless, president of O'Shaughnessy Asset Management.

For instance, U.S. home furnishings retailer Pier 1 Imports Inc. fell 12 per cent the first week of May, but it was up 40 and 184 per cent, respectively for the four and 12 months ended May 7. "The stock was doing really well and going into that week it got beaten up," he said.

Resources, particularly energy funds, lost steam as well as the price of oil fell amid worries that Europe's woes could slow down a global recovery. Sprott Energy, which tends to hold smaller-company stocks, lost 10.2 per cent, while Altamira Energy shed 9.9 per cent.

***

Mutual funds hit the hardest the first week of May
(As of Apr. 30)Latest(May 3-7)(May 13)% rtn (as of Apr. 30)
NameAsset ClassAssets ($-mil)MER1-wk % rtnYTD % rtn1-yr3-yr5-yr10-yr
AGF European Equity ClassEuropean Equity543.293.01-12.9-22.1-0.6-20.0-3.81.5
Excel Emerging Europe AEmerging Mkts Equity11.102.92-12.7-4.352.5
PwrSh Gl Clean Energy Cl AGlobal Equity-11.8-19.0
RBC O'Shaughnessy U.S. GrowthU.S. Sm/Md Cp Equity231.721.47-11.213.835.0-20.8-5.8-0.9
Renaissance EuropeanEuropean Equity14.692.70-10.9-15.110.2-13.6-2.5-2.8
Dynamic Power Amer Currency NeutralU.S. Equity28.892.86-10.88.245.7-5.4
Galileo Small/Mid CapCdn Foc. Sm/Md Cp Eq.2.07-10.53.665.06.0
Claymore Global Monthly Adv Div ETFCdn Sm/Md Cp Equity65.540.64-10.2-1.544.2
Sprott EnergyNatural Res. Equity133.002.85-10.210.983.6-8.44.2
Front Street Small Cap-BCdn Sm/Md Cp Equity23.952.50-10.27.694.6
Mackenzie Univ Wld Resource ClassNatural Res. Equity162.032.50-10.2-4.836.9-8.85.5
Claymore BRIC ETFEmerging Mkts Equity341.400.66-10.2-5.350.76.9
AGF International Stock ClassInt'l Equity723.152.90-10.1-16.85.2-16.1-1.9-0.1
Investors Euro Mid-Cap Equity-CEuropean Equity804.192.87-9.9-9.716.3-14.01.4
Altamira Energy FundNatural Res. Equity20.612.51-9.92.747.0-1.79.3
Front Street Special Opp Canadian-BNatural Res. Equity43.692.82-9.95.393.89.220.425.8
Value Leaders Bal Income Port-IGlbl Fixed Incm Bal.11.790.61-9.7-7.514.9
CI EuropeanEuropean Equity61.372.33-9.7-10.212.3-17.0-3.0-1.4
Manulife European Opportunities FdEuropean Equity7.842.70-9.6-11.813.5
Sprott GrowthCdn Foc. Sm/Md Cp Eq.102.002.90-9.6-1.047.4-10.9
FÉRIQUE EuropeanEuropean Equity83.691.25-9.6-12.116.4-12.2-0.8
Quebec Professionals European EquEuropean Equity1.49-9.6-11.210.1-16.9-4.2-4.2
HSBC European-IEuropean Equity48.722.43-9.6-14.013.5-15.6-3.2-3.6
Standard Life European Equity-AEuropean Equity10.662.42-9.5-12.012.5-17.0-3.5
BMO S&P/TSX EW Gbl Base Metals ETFNatural Res. Equity30.77-9.5-2.1
Investors European Equity-CEuropean Equity961.132.86-9.5-14.47.4-14.7-1.8-1.2
Claymore Oil Sands Sector ETFNatural Res. Equity36.620.63-9.41.442.6-3.4
PS FTSE RAFI Global+ Fundamental AGlobal Equity-9.4
TD European IndexEuropean Equity44.980.97-9.4-13.412.2-13.5-1.7-2.7
Mackenzie Univ European OpportEuropean Equity154.902.44-9.4-14.08.9-16.6-4.3-5.4
MSCI Europe ($ Cdn)14.3-12.6-0.4-1.4
MSCI World ($ Cdn)16.7-9.0-0.5-2.9
S&P 500 Composite ($ Cdn)-3.50.715.2-9.9-3.8-5.7
S&P/TSX Total Return-4.24.134.7-0.28.35.0
Source: Globe Investor

© 2007 The Globe and Mail. All rights reserved.

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