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Hedge funds, precious metal funds among the star performers over five years

swon@globeandmail.com

What are we looking for?

The best performing funds in all categories, including hedge funds, over the past five years. Five years is a good measuring period because it incorporates the 2008 bear market.

The screen

We searched our database for the 15 funds with the best returns for the five years ended Nov. 30. The U.S. dollar and duplicate versions of the funds were excluded, as well as those closed to new investors.

What did we find?

Five of the top 15 gainers were hedge funds. The rest were regular mutual funds plus a low-fee exchange-traded fund (ETF).

In contrast to regular mutual funds, hedge funds can make use of borrowed money and the ability to short stocks to outperform.

Perhaps as a result, three hedge funds topped our list. CI Trident Global Opportunities led the pack with a 21.1-per-cent annualized return. This fund, which is run by Nandu Narayanan of Trident Investment Management, enjoyed a 43.6-per-cent gain in the 2008 market after making an early bet on the U.S. housing and financial crisis. Because the fund is defensively positioned, its average annual return has been virtually flat for three years.

Rising commodity prices and strong stock picks boosted returns at several precious metals and natural resource equity funds. Kevin MacLean of Sentry Investments led all mutual funds in returns with an annualized 15.2-per-cent gain in his Sentry Precious Metals Growth fund. Meanwhile, the iShares S&P/TSX Capped Materials ETF, which has five gold stocks in its top 10 holdings, posted an average annual return of 10.3 per cent over five years.

Among conventional mutual funds, RBC Canadian Equity Income stands out because it falls in the conservative Canadian-dividend-and-income category. Overseen by Jennifer McClelland of RBC Global Asset Management, it has gained an annualized 14.4-per-cent return over five years. While the fund was first launched as an income trust equity fund in 2006, its name and mandate changed in 2009.

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THE FIVE-YEAR FUND STARS

Last Reported Assets5 Years toYTD toAnnual Returns (From Jan 1 to Dec 31)
Fund NameFund Categoryin $millionsMERNov 30, 2011Nov. 30, 201120102009200820072006
CI Trident Global OpportunitiesAlternative strategies127.72.6521.08%3.94% -4.90%-3.68%43.62%89.03%0.05%
King & Victoria Fund LPAlternative strategiesN/AN/A19.75%0.70%59.70%95.25%-24.53%0.73%9.29%
Creststreet Energy OpportunitiesAlternative strategies25.1219.37%9.13%51.59%81.11%-42.80%41.17%-27.52%
Sentry Precious Metals GrowthPrecious metals equity755.82.7215.18%-12.05%78.52%85.38%-37.14%9.73%74.04%
RBC Canadian Equity IncomeCanadian dividend and income equity839.72.0814.43%9.29%23.99%59.52%-18.82%9.45%N/A
RBC Global Precious MetalsPrecious metals equity1323.42.1413.52%-17.73%75.12%65.68%-26.18%9.04%52.40%
Galileo High Income PlusCanadian small or mid-cap equity61.42.5613.34%6.40%34.23%57.78%-22.19%6.43%N/A
Marquest ResourceNatural resources equity12.42.0012.77%-19.03%69.93%69.50%-52.31%65.21%39.00%
Dynamic Small BusinessCanadian small or mid-cap equity497.22.7712.23%0.33%27.26%38.84%-18.05%18.53%17.93%
Sentry Small/Mid Cap IncomeCanadian small or mid-cap equity122.32.8411.98%5.35%26.28%43.52%-22.21%14.09%10.69%
Dynamic Precious MetalsPrecious metals equity948.42.7310.78%-18.61%68.39%60.92%-27.65%5.60%62.67%
iShares S&P/TSX Cap Materials IndexNatural resources equity261.70.5510.30%-11.39%35.77%33.48%-26.83%29.51%48.39%
BMG BullionFund-AMiscellaneous - commodity307.83.039.88%6.29%31.10%19.29%-4.08%2.54%24.52%
Sprott Bull/Bear RSP AAlternative strategies179.03.549.58%-13.08%36.90%0.33%8.18%23.21%23.98%
PrimevestfundAlternative strategies9.10%-22.96%32.52%61.25%-35.88%49.70%35.80%
S&P/TSX Total Return1.95%-7.13%17.61%35.06%-33.00%9.83%17.26%
S&P 500 Composite Total Return Index($Cdn)-2.40%3.64%9.35%8.08%-21.92%-10.55%15.74%
MSCI World ($ Cdn)-3.61%-2.60%6.76%11.78%-26.05%-7.10%20.58%
Source: Globe Investor

© 2007 The Globe and Mail. All rights reserved.

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