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Mutual Fund News

Funds with strong momentum in a roller-coaster market

swon@globeandmail.com

What are we looking for?

Funds you wish you had owned in the first half of this year.

Given the roller-coaster stock markets, let's see which investment funds led the way. Keep in mind the year is far from over, and funds at the front of the pack may not necessarily be on top at year end.

The screen

We ranked the 15 best performers over six months to June 30. U.S. dollar, segregated, and duplicates of funds (including currency neutral versions) were excluded, as well as those in the alternative strategies category.

What did we find?

Energy, health care and real estate investment trusts emerged as sectors with strong momentum.

Bissett Energy topped the list with a 17.4-per-cent gain, helped by strong performance from some of its small-to-mid-cap oil and gas holdings.

Some natural gas producers are making money even though the price for its commodity remains depressed. Stocks in the fund such as Peyto Exploration & Development Corp. and Tourmaline Oil Corp. have done well because they have exposure to more profitable natural gas liquids whose prices closely track crude oil, said its manager Garey Aitken of Bissett Investment Management.

The fund also got a lift from service companies such as Savanna Energy Services Corp. and Pure Energy Services Ltd. because of a resurgence in drilling activity for crude oil or natural gas liquids, he said. Merger and acquisition activity also helped performance as holdings like ProspEx Resources Ltd. and Stoneham Drilling Trust were taken over by other companies earlier this year.

Some broad-based funds also made it to the Top 15. Dynamic Power America Growth and Dynamic Power Global Growth rose 15.6 per cent and 15 per cent, respectively, as consumer discretionary and technology stocks helped fuel returns.

While Dynamic Power American Currency Neutral Fund, which hedges its foreign currency exposure, was excluded because of duplication, it actually outpaced the top 15 with a 19.2-per-cent gain.

Big winners in the Dynamic funds during the first six months included Chipotle Mexican Grill Inc., Lululemon Athletica Inc., Under Armour Inc., Burberry Group PLC, VMware Inc. and Teradata Corp., said manager Noah Blackstein of Goodman & Co. Investment Counsel Ltd.

*****

BEST FUND PERFORMERS IN THE FIRST SIX MONTHS OF 2011

LatestAssets% return (periods ended June 30, 2011)
Fund nameCategoryMER($-mil)6-mo1-yr3-yr5-yr10-yr
Bissett Energy CC-ANatural Resources Equity2.5252.517.420.357.21.6-
Front Street Energy Gw Ser-IRetail Venture Capital4.6211.016.336.0-2.2-0.3-
Dynamic Power American GrowthU.S. Equity2.35491.515.651.56.67.33.2
BMO EW US Hlth Care Hg CAD Idx ETFHealth Care Equity0.356.015.534.9---
Dynamic Power Global Growth ClGlobal Equity2.45642.815.045.35.19.76.9
Matrix Small CompaniesCdn Sml/Md Cap Equity3.5028.713.566.13.93.0-
TD Health SciencesHealth Care Equity2.75156.412.824.47.95.20.4
iShares S&P/TSX Capped REIT IndexReal Estate Equity0.551,237.612.830.711.38.2-
Criterion REIT Income FundReal Estate Equity2.502.512.718.5---
EnerVest Natural Resource Fund LtdNatural Resources Equity2.9536.112.454.4-7.0-2.79.2
BMO Junior Gas Index ETFNatural Resources Equity0.5514.011.850.2---
Bissett Microcap-ACdn Sml/Md Cap Equity3.7146.911.511.143.49.98.0
BMO Equal Weight REITs Index ETFReal Estate Equity0.5594.511.411.330.4--
Middlefield Groppe Tactical EnergyNatural Resources Equity3.2121.010.716.026.9--
Trimark Global Health Sci ClassHealth Care Equity2.8682.610.513.926.03.7-0.3
S&P/TSX Total Return0.220.90.25.78.0
MSCI World ($ Cdn)2.419.3-0.8-0.1-0.1
S&P 500 Composite ($ Cdn)1.816.5-0.8-2.1-3.7
Source: Globe Investor

© 2007 The Globe and Mail. All rights reserved.

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