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Reasons to keep your adviser on speed-dial

rcarrick@globeandmail.com

What we're looking at

All week, we've been focusing on high-achieving funds that have delivered consistently good returns. And now for something completely different. Here, we've gathered a collection of funds with consistently disappointing results.

Our screen

Each fund on this list, ranked by assets, has accomplished something dismal - fourth-quartile returns in the 12 months, five years and 10 years to July 31. Quartiles divide funds in a category in four groupings - first quartile is the elite and fourth is the basement. Excluded from the list were funds with high upfront minimum purchase requirements, pooled funds and segregated funds. Funds on this list are ranked by assets.

What we found

Own any of these funds? If an investment adviser chose them for you, get on the phone today to ask why these consistent bottom dwellers remain in your portfolio. Better funds are out there. To find them, start with Thursday's list of all-star funds that have ranked first quartile in the past one-, five- and 10-year periods (catch up on past Number Crunchers here: http://tgam.ca/u1e)

Let's give some special recognition to the funds on this list that have managed a trifecta of misery by losing money over each of the time periods factored into this screen. Somehow, TD International Value is hanging onto close to half a billion dollars in assets despite losing 8.2 per cent annually over the past decade, 8.6 per cent annually over the past five years and 3.5 per cent over the past 12 months. The handy fund charting tool on Globeinvestor.com shows that holding this fund over the past 10 years would have burned $10,000 down to $4,381.

An encouraging observation to close. The funds that topped Thursday's all-star list have substantially more in assets than the funds on today's list of fourth-quartile funds. Your assignment for the year ahead is to see whether you have any duds like these and then blow them out of your portfolio. Better stuff is out there.

****

Fourth-Quartile Funds
As of July, 2010 As of July 31
Name Category Assets ($ millions) LatestMER 1-yr (%) 5-yr (%) 10-yr (%)
Mackenzie Maxxum DividendCanadian Dividend and Income Equity1,305.272.384.65-0.494.75
RBC Balanced GrowthCanadian Neutral Balanced918.512.263.651.192.09
Mackenzie Maxxum Dividend GrowthCanadian Dividend and Income Equity872.462.384.68-0.054.49
AGF Traditional BalancedCanadian Neutral Balanced662.012.373.451.250.08
AIC Diversified CanadaCanadian Focused Equity543.192.533.68-1.900.33
National Bank Global EquityGlobal Equity498.092.600.44-6.44-5.20
TD International Value-IInternational Equity494.152.42-3.46-8.62-8.18
National Bank Canadian EquityCanadian Equity493.832.304.891.230.60
CIBC Canadian EquityCanadian Equity380.522.295.670.750.49
Dynamic Dollar-Cost AveragingCanadian Short Term Fixed Income234.101.060.021.641.83
Desjardins Global Equity ValueGlobal Equity172.452.48-0.50-8.17-5.21
RBC International EquityInternational Equity133.742.15-1.17-4.90-5.09
CI International BalancedGlobal Equity Balanced131.262.362.73-1.51-2.55
Trimark Global Health Sci ClassHealth Care Equity87.762.86-5.84-5.27-4.40
AIC ValueU.S. Equity67.212.622.08-11.91-8.57
Acuity Money MarketCanadian Money Market49.921.830.001.101.05
AGF Short Term Income ClassCanadian Short Term Fixed Income44.410.880.001.731.71
Scotia U.S. GrowthU.S. Equity27.592.59-0.30-8.65-9.01
HSBC U.S. Equity-IU.S. Equity27.482.363.11-7.11-8.61
AGF Global Real Estate Equity ClassReal Estate Equity19.913.3012.80-2.903.52
AGF Japan ClassJapanese Equity19.593.13-8.65-8.32-9.05
Scotia EuropeanEuropean Equity18.322.68-1.97-5.34-6.09
Stone & Co. Flagship Stock BCanadian Focused Equity17.133.421.08-4.70-1.02
HSBC Emerging Markets-IEmerging Markets Equity16.232.785.613.271.63
Stone & Co. Flagship Stock ACanadian Focused Equity10.922.901.55-4.23-0.67
Renaissance Global Small CapGlobal Small/Mid Cap Equity9.842.923.63-5.44-6.09
Renaissance US Equity GrowthNorth American Equity6.732.630.92-9.91-7.89
Source: Globeinvestor.com

© 2007 The Globe and Mail. All rights reserved.

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