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Large-cap funds reap Apple harvest

swon@globeandmail.com

What are we looking for?

Stars among U.S. large-cap stock funds this year.

U.S. stock markets have been buoyed by signs of economic recovery, while shares of Apple Inc. have been on fire.

The screen

We looked for the 15 top performers in the U.S. equity category to March 23. U.S. dollar, segregated and duplicate versions of funds (except for currency neutral) were excluded.

What did we find?

Exchange-traded funds [ETFs] and index mutual funds tracking the largest 100 non-financials on the Nasdaq Stock Market are at the top of the heap.

Those funds have garnered robust 19- to 20-per-cent returns this year. The Nasdaq has been on roll, propelled by stocks such as Apple, which has surged nearly 50 per cent. Last week, the maker of the iPad and iPhone devices announced it planned to use some of its cash hoard to pay a quarterly dividend, and buy back shares.

The top actively managed fund was HAP North American Growth ETF, up nearly 19 per cent. It has over 30 per cent in technology stocks with close to 10 per cent in Apple. "I have trimmed, and sold some last week," said manager Stephen Rogers of Horizons Investment Management Inc.

Qualcomm Inc., a maker of mobile phone chips, has also helped his fund. Other winners include Alexion Pharmaceuticals Inc., maker of the blockbuster drug Soliris, and Intuitive Surgical Inc., a provider of robotic surgical systems. Luxury handbag maker Coach Inc. and firearm manufacturer Sturm Ruger & Co. Inc. have also had "nice moves," he added.

Mr. Rogers said he would not be surprised if the U.S. stock market takes a breather, but does not foresee a significant correction. Some investors worry that there will be a summer selloff similar to the past two years, "but there are significant differences," he suggested.

The euro-zone debt crisis, which had an impact on markets, appears to be under control for now, while falling interest rates globally can provide economic stimulus, he said. "That could counter the 'sell in May' impulse.' Aside from that, the U.S. economy is getting better."

The S&P 500, which closed Monday at 1,416.51 points, should be able to reach the 1,450 level, but then "chop around for the latter part of the year," he suggested.

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HOW U.S. EQUITY FUNDS ARE FARING THIS YEAR

AssetsYTD returns2012Calendar year returnsto Feb. 29, 2012
FundMER(in US$ mil.)(March 23/12)(to Feb. 29)20112010200920081 year 3 YEARS
PS QQQ (CAD Hedged) ETF 19.99%15.20%
BMO Nasdaq 100 Hedged Index ETF0.3794.719.87%15.14%2.74%11.54%
iShares Nasdaq 100 Index (CAD-Hdgd)0.3519.87%15.13%
TD Nasdaq Index-I1.0293.019.58%14.83%1.74%16.70%49.16%-43.21%10.22%30.15%
PowerShares QQQ Class SrA0.818.83%14.73%
HAP North American Growth ETF1.0014.218.68%12.62%-1.17%7.19%
Dynamic Power Amer Currency Neutral3.9785.617.92%11.40%2.68%43.41%26.75%-57.16%4.11%35.33%
CIBC Nasdaq Index1.2454.317.37%11.90%4.52%12.91%29.69%-27.71%13.21%21.76%
Scotia Nasdaq Index1.0816.517.30%11.60%4.49%12.48%32.16%-29.49%12.87%21.61%
Dynamic Power American Growth3.61539.715.78%8.14%5.60%39.38%13.37%-44.14%6.17%26.82%
Desjardins American Equity Growth2.55709.815.67%12.69%-9.38%12.08%-1.35%12.75%
AGF American Growth Class2.99546.315.26%10.06%-4.40%14.18%16.04%-34.87%0.15%12.62%
Northwest U.S. Equity2.6312.315.12%8.77%-11.11%14.97%33.61%-33.50%-6.05%18.42%
IG AGF U.S. Growth-A2.92205.015.01%10.12%-4.29%14.08%16.62%-34.65%0.76%12.71%
TD U.S. Blue Chip Equity2.55782.414.93%9.67%1.63%8.21%18.57%-29.73%7.87%15.16%
Nasdaq Composite ($ Cdn)15.78%10.48%0.41%11.10%22.97%-26.31%8.03%18.69%
S&P 500 Composite Total Return Idx ($Cdn.)9.76%5.74%4.42%9.35%8.08%-21.92%6.49%15.40%
Source: Globe Investor, Bloomberg

© 2007 The Globe and Mail. All rights reserved.

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