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Mutual Fund News

Caution with commodities helped Mawer lead the pack

swon@globeandmail.com

What are we looking for?

Index-beaters among Canadian equity funds.

With low-fee exchange-traded funds challenging mutual funds for customers, let's see which funds have outpaced the S&P/TSX total return index over five years. After all, the fund industry urges investors to think longer term.

The screen

We looked for the 15 best returns among Canadian equity funds for the five years ended June 30. U.S. dollar, segregated and duplicate versions of funds were excluded, as well as funds not sold to the general public.

What did we find?

Two out of five funds that outpaced the 5.7-per-cent annualized return by the index were ETFs.

Claymore Canadian Fundamental ETF, whose stocks are chosen according to criteria such as dividends, cash flow, sales and book equity value, gained 6.9 per cent. And iShares S&P/TSX 60 ETF, which tracks the 60 largest Canadian-listed companies, returned nearly 6 per cent.

Among the index-beaters, Mawer Canadian Equity, which is run by Jim Hall of Mawer Investment Management Inc., led the way with a 7.1-per-cent gain. Mr. Hall has been cautious on commodity stocks, a stance that helped his fund gain 8.5 per cent for the first six months of this year.

A common thread among many of the outperformers was low fees, with most charging well below 2 per cent. But IA Clarington Canadian Leaders still beat the index with a 6.3-per-cent annualized gain despite charging 2.4 per cent annually.

There was a switch at the helm, however. Pierre Bernard, who had managed the fund since 1999, left the job June 10, and said in an interview he was fired. He said he was surprised, and acknowledged his fund had underperformed in the shorter term.

Eric Frape of IA Clarington Investments said the firm "parted ways" with Mr. Bernard. Dan Bastastic, a prized new hire from Mackenzie Financial Corp., is now running Mr. Bernard's two other income-oriented fund mandates.

And manager Marc Gagnon was given the IA Clarington Canadian Leaders fund, having achieved a similar 6.2-per-cent annual return over five years on his IA Ecoflex Canadian Equity Growth segregated fund, and a better short-term record, according to Mr. Frape.

*****

BEST PERFORMING CANADIAN EQUITY FUNDS OVER FIVE YEARS TO JUNE 30, 2011

ASSETS5-yr6-Mo.Annual Returns (from Jan. 1 to Dec. 31)
FundMER(in Mil. $)Avg. Rtn.Rtn.20102009200820072006
Mawer Canadian Equity1.24161.07.12%8.53%13.74%29.45%-29.68%11.50%13.94%
Claymore Cdn Fundamental Index ETF0.60236.56.88%1.53%13.69%44.26%-31.60%7.30%N/A
IA Clarington Canadian Leaders2.38250.16.27%-2.87%8.28%21.46%-23.52%17.75%17.25%
iShares S&P/TSX 60 Index0.1511,098.45.95%-0.13%13.62%31.46%-31.09%10.91%21.47%
Beutel Goodman Canadian Equity-D1.531,773.75.79%0.99%15.52%24.12%-22.87%5.27%15.12%
DFA Canadian Core Equity A1.49659.85.63%-1.39%20.69%41.72%-34.88%6.06%15.84%
iShares S&P/TSX Cap Composite Idx0.251,394.35.60%-0.62%17.27%34.41%-32.97%9.53%18.86%
Fidelity Cdn Disciplined Equity-A2.49536.15.37%-1.87%17.55%38.83%-35.79%12.90%15.18%
Leith Wheeler Canadian Equity B1.52129.65.31%5.41%15.42%27.54%-32.87%9.08%17.55%
Desjardins Environment2.35207.65.28%-2.63%10.90%38.39%-32.36%15.10%17.04%
Bissett All Cdn Focus A2.6232.15.24%2.96%20.43%34.03%-39.88%11.05%19.09%
Altamira Canadian Index0.64288.65.23%0.28%13.13%31.18%-31.41%10.59%18.55%
RBC Canadian Index0.70671.25.15%-0.12%16.78%34.11%-33.07%9.34%16.90%
McLean Budden Canadian Equity D1.2523.35.02%-0.40%14.29%33.38%-31.53%6.69%16.39%
Scotia Canadian Index99.00260.94.92%-0.31%16.49%34.33%-33.22%9.02%16.18%
S&P/TSX Composite Index2.75%-1.06%14.45%30.69%-35.03%7.16%14.51%
S&P/TSX Total Return5.67%0.16%17.61%35.06%-33.00%9.83%17.26%
Source: Globe Investor

© 2007 The Globe and Mail. All rights reserved.

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