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Foreign exposure: The decade's top global stock funds

swon@globeandmail.com

What are we looking for?

Best global equity funds over a decade.

Investors have looked abroad because this country only represents about 4 per cent of the world's stock market value. Because the domestic market is dominated by resource and financial stocks, foreign companies offer a way to diversify into areas such as consumer staples, technology and health care.

The screen

We ranked the 15 top performers for the 10 years ended Aug. 31. U.S. dollar, segregated and duplicate versions of funds were excluded. We also left out portfolios of funds and offerings restricted to certain investors.

What did we find?

Dynamic, Dynamic, Dynamic.

Three Dynamic global stock funds emerged among the top five. And they are also run with different strategies by managers at Goodman & Co. Investment Counsel Ltd.

Dynamic Power Global Growth, which has been run by Noah Blackstein since inception, led the way among all funds with an average annual return of 6.5 per cent. Dynamic Global Discovery, overseen by David Fingold since 2004, gained an average of 5.3 per cent a year, while Dynamic Global Value managed by Chuk Wong since 2002 has returned 2.3 per cent annually.

These funds outpaced the 0.5-per-cent loss by the MSCI World Index in Canadian dollars. Mr. Blackstein has undoubtedly made some astute stock picks for his Dynamic Power Global Growth. He is also the only one of the three who can earn performance fees if he beats certain targets. His gains are noteworthy given that the returns are also after those extra fees, and he doesn't hedge his foreign currency exposure.

Long-time investors will notice that Templeton Growth Fund, the granddaddy of global stock funds launched in 1954, did not make the cut. This fund, overseen by several managers since 1987 when the now deceased Sir John Templeton retired, lost 1.2 per cent annually.

And AGF Global Value, a former high-profile fund called AGF International Value until 2008, is also absent. It was the worst performer with a 5.6-per cent annual loss over the decade. John Arnold of AGF Management Ltd., who has run the fund since 2006, retires this month.

Past performance is certainly no guarantee of future returns. It will be interesting to see how the new crop of stars will do over the next decade.

*************

BIGGEST GAINERS AMONG GLOBAL EQUITY FUNDS FOR 10 YEARS TO AUG. 31

(Aug. 31)Latest(Aug. 31)Calendar year % return
Fund nameAssets ($-mil)MER10-yr % rtn201020092008200720062005
Dynamic Power Global Growth Cl583.92.456.522.330.0-47.245.011.415.6
TD Entertainment & Communications125.82.815.417.941.5-34.61.625.812.8
Dynamic Global Discovery703.42.635.316.423.7-30.47.126.227.9
Mackenzie Cundill Value 'C'4,505.52.512.79.514.7-25.3-2.09.412.1
Dynamic Global Value Fund780.02.392.310.347.3-43.80.922.822.7
Mackenzie Ivy Foreign Equity-A1,856.02.472.23.65.8-6.7-4.216.03.2
Renaissance Global Focus60.42.851.59.912.1-31.316.314.214.7
AGF Aggressive Global Stock38.53.181.210.817.5-43.120.412.428.0
Trimark Fund-SC865.31.661.25.010.4-28.6-9.727.04.2
Manulife Tax-Managed Grwth Fd24.62.801.17.618.5-26.83.016.39.7
CI Synergy Global Corporate Class134.22.450.48.07.3-29.0-4.617.712.1
AGF Global Equity Class320.92.830.34.612.3-26.1-5.019.111.1
Castlerock Global Leaders D14.82.220.012.623.7-20.2-9.011.2-1.9
Mackenzie Focus257.12.490.04.712.6-23.91.39.610.5
CI Global Managers Corporate Class29.82.44-0.24.615.2-16.7-8.517.43.5
MSCI World ($ Cdn)-0.56.811.8-26.1-7.120.66.6
S&P/TSX Total Return8.117.635.1-33.09.817.324.1
Source: Globe Investor

© 2007 The Globe and Mail. All rights reserved.

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