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Mutual Fund News

Small-cap and resource funds lead the pack

swon@globeandmail.com

What are we looking for?

Investment fund leaders and laggards over the past year.

With the recent market volatility, it might be time to think about taking some profits off the table if you were lucky enough to own some high fliers. If you owned some of the biggest losers in a market recovery, you might want to examine whether your reasons for owning them are still valid.

Today's search

We examined the one-year return to April 30 for all mutual funds, exchanged-traded funds and also retail venture capital (labour-sponsored) funds. U.S. dollar, segregated, pooled, alternative strategy and duplicate versions of funds were excluded. We also only screened for funds requiring no more than a $10,000-minimum investment.

What did we find?

Smaller company and resource funds are leading the performance pack, while mostly retail venture capital funds have been drowning in red ink.

Given that Redwood Global Small Cap has also been invested in resource stocks, it's not too surprising that it has risen to the top of the heap with an eye-popping, one-year gain of 132.3 per cent.

Since the end of April as markets tumbled because of concern about Greece's debt woes, its manager Michael Decter of LDIC Inc. has raised cash to about 65 per cent from 7 per cent, and is now looking to reinvest it.

"We felt the commodities were rolling over a bit, and wanted to have some cash available for both new issues ... and to preserve the gains," he said.

He has been paring mostly his base-metal stocks because of "perceptions of the slowing of the global economy," he said. Over the past year, Petrominerales Ltd., Red Back Mining Inc. and Consolidated Thompson Iron Mines Ltd. have been among his winners.

Mr. Decter expects continued choppiness in the market. "I think it will take another month or two of good employment growth [in Canada and the United States] to convince investors that they should not overweight the euro zone difficulties," he said.

"Our view is that North America is coming on. ... The Fed upped its [U.S. growth] target to between 3.2 and 3.7 per cent for 2010, and that is up from its previous estimate of 2.8 to 3.5 per cent. And Canada is doing well."

Among the laggards, Claymore Natural Gas Commodity ETF lost 52.6 per cent as gas prices continued their slump. And retail venture capital funds have had a rough time because they have not been able to sell investments or exit through an initial public offering in the current environment.

Redemptions in VenGrowth II Investment Fund, which lost 24.1 per cent, have been halted since December, 2008. The same occurred last November with VenGrowth Advanced Life Sciences, which lost 20 per cent over the past year. Investors are getting some money back through an annual payout as investments are gradually sold.

****

Best and Worst Funds as of April 30, 2010
(As of Apr. 30)Latest(May 20)% return (as of Apr. 30)
Fund nameAsset ClassAssets ($-mil)MERYTD % rtn1-yr2009200820072006
Best
Redwood Global Small Cap*Globl Sml/Md Cap Equity7.7018.117.1132.3150.3
Raymond James Canadian Focus PicksCdn Sml/Md Cap Equity13.062.684.1119.7127.5
Sentry Select Precious Metals GrwthPrecious Metals Equity459.932.7516.3105.085.4-37.19.774.0
TDK Resource Fund Inc.Natural Resources Equity40.734.44-2.2103.7106.1-47.7-5.049.5
Front Street Growth-BCdn Sml/Md Cap Equity153.422.73-2.4103.4129.9-53.5-1.320.7
Sentry Select Mining Opportunity ClPrecious Metals Equity45.582.8810.696.1145.6-69.810.0
Front Street Small Cap-BCdn Sml/Md Cap Equity23.952.50-6.294.6109.516.6
Front Street Special Opp Canadian-BNatural Resources Equity43.692.82-8.193.8131.4-46.38.022.5
Sprott Gold and Precious MineralsPrecious Metals Equity573.002.841.889.8113.8-49.6-16.456.2
Mavrix ExplorerNatural Resources Equity14.133.15-7.987.0198.1-67.18.19.8
Ark Aston Hill Energy ClassNatural Resources Equity3.131.286.574.1
Sprott EnergyNatural Resources Equity133.002.85-3.983.676.1-64.517.96.1
Chou RRSP*Cdn Foc. Sml/Md Cap Eq.144.291.7732.281.527.8-42.4-9.29.6
Mavrix Multi Series ExplorerNatural Resources Equity70.742.20-7.279.5163.2-62.37.312.5
BMO GDN Precious Metals Ad SrPrecious Metals Equity5.042.273.378.572.2
Worst
Claymore Natural Gas Commodity ETFMiscellaneous188.590.92-34.2-52.6-61.3
Axis Investment Funds Inc. Ser. IRetail Venture Capital1.656.78-6.6-50.4-55.1-61.0-18.5-13.0
VenGrowth II Investment Fund Inc.*Retail Venture Capital4.79-6.9-24.1-22.0-24.1-12.6-2.4
Covington Strategic Capital Fund IRetail Venture Capital3.41-8.3-22.5-17.529.09.5-0.9
VenGrowth Adv Life Sciences ClA SrA*Retail Venture Capital5.51-11.7-20.0-13.2-7.5-6.6-0.5
Advantage Growth**Retail Venture Capital7.53-4.7-19.9-10.3-31.7-14.0-15.8
GrowthWorks Cdn Fund Ltd. (FOF Tra)Retail Venture Capital9.727.22-4.5-15.6-13.9-7.1-1.1
ENSIS Growth Fund Inc.*Retail Venture Capital52.624.95-15.3-13.914.22.1-7.5
Peer Diversified Mortgage*Miscellaneous-7.5-13.2-6.0-0.16.79.8
New Generation Biotech Equity-IRetail Venture Capital7.18-10.1-13.2-7.6-10.7-5.1-20.0
GrowthWorks Canadian*Retail Venture Capital88.465.50-3.3-13.1-11.9-6.2-0.22.9
Lawrence Enterprise IRetail Venture Capital6.402.4-12.4-21.2-25.58.2-13.9
GrowthWorks Cdn Diversified I*Retail Venture Capital12.378.07-4.0-10.9-8.1-15.00.74.0
GrowthWorks Cdn Growth I*Retail Venture Capital10.358.10-4.1-10.6-7.9-17.32.56.0
Altamira Global BondGlobal Fixed Income276.721.790.6-10.3-13.632.5-6.51.9
MSCI World ($ Cdn)16.711.8-26.1-7.120.6
S&P 500 Composite ($ Cdn)15.25.5-23.8-12.213.6
S&P/TSX Total Return-1.934.735.1-33.09.817.3
*Last Valued 5/14/2010
**Last Valued 5/7/2010
Source: Globe Investor

© 2007 The Globe and Mail. All rights reserved.

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