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A September to remember for U.S. equity funds

What are we looking for?

U.S. equity funds outpacing the S&P 500 in September. While September has been the worst month on average for U.S. stocks based on market history, it bucked the trend this year. This September was the best since 1939 as the index surged 8.8 per cent (5.3 per cent in Canadian dollars). Let's see who did even better.

The search

We screened for the 15 best performers last month among U.S. equity funds. U.S. dollar, segregated, pooled and duplicate versions of the funds were excluded.

What did we find?

Lots of currency-hedged funds and index offerings.

Dynamic Power American Currency Neutral topped the chart with a robust 15.7-per-cent gain, but even the unhedged Dynamic Power American Growth version outperformed with a 11.9-per-cent return. The currency-hedged version managed to hold onto U.S. stock gains even as the loonie rose against the U.S. dollar.

Technology names, which represent about half of the portfolio, dominated performance, said manager Noah Blackstein of Dynamic Funds. Names like Apple Inc., Network Appliance Inc. and Netflix Inc. helped returns.

"I think we are in the early stages of a new bull market in technology," Mr. Blackstein said. "We haven't had one in a decade, and it probably started in 2008. ... There are a whole bunch of new drivers in technology [ranging from smart phones to cloud computing] that are transforming the space."

Shares of some of the mid-capitalization technology companies are moving, "not only because of strong fundamentals, but also because of scarcity and merger-and-acquisition activity in the technology space," he added.

Funds tracking the technology-focused Nasdaq 100 also popped up on our list.

This index of the 100 largest non-financial companies listed on the Nasdaq stock market rose 13.1 per cent (9.4 per cent in Canadian dollars) during the month, an even better September than the S&P 500.

BMO Nasdaq 100 hedged exchange-traded fund was the second-best performer on our list with a 12.6-per-cent gain, while TD Nasdaq Index rose 12.5 per cent in September. Both are currency hedged.



% returns to Sept. 30
FundLatest MERAssets ($-mil)1-moYTD1-yr2-yr3-yr5-yr10-yr
Dynamic Power Amer Currency Neutral2.932.015.6725.6643.961.46-10.260.64N/A
BMO NASDAQ 100 Hedged Index ETF*0.442.712.553.58N/AN/AN/AN/AN/A
TD NASDAQ Index-I1.074.112.535.4213.637.92-4.072.10-7.25
Dynamic Power American Growth2.4319.511.9226.1341.556.13-5.251.95-2.81
Acker Finley Select US Value 50-A1.833.111.896.1015.300.00-16.57-8.65N/A
Trimark US Equity Priv Pl-Curr Ntrl2.21.610.586.938.41-2.70-7.22N/AN/A
TD U.S. Eqty Currency Neutral Pt-A2.4N/A9.931.967.52-1.76-9.49N/AN/A
PH&N Currency-Hedged U.S. Equity-D1.265.59.840.205.15-6.46-11.23N/AN/A
Mackenzie Univ US Div In-T5(Hedged)2.551.19.810.505.09-6.05-11.32N/AN/A
IA Clarington Sarbit U.S. Equity2.6102.39.0520.8825.87N/AN/AN/AN/A
Scotia Nasdaq Index1.
CIBC Nasdaq Index1.245.98.904.9810.769.48-0.831.45-9.51
Altamira US Currency Neutral Index0.5114.68.792.247.85-3.24-10.35-2.24-2.30
North Growth U.S. Equity1.2N/A8.636.2110.939.15-1.690.424.96
iShares S&P 500 Index (CAD-Hgd)0.21,351.68.612.598.41-3.63-10.26-1.30N/A
S&P 500 Composite8.762.347.96-1.02-9.25-1.47-2.28
S&P 500 Composite ($ Cdn)5.270.703.69-2.50-8.24-3.80-5.93
* From Jan. 19 inception date; Source: Globe Investor

© 2007 The Globe and Mail. All rights reserved.

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