What we're looking at
The U.S. stock market has massively outperformed Canada lately. Which U.S. equity funds might be a good vehicle for investors who want to buy American?
We started with all U.S. equity funds that had a long-term history and then zeroed in on funds that made money for their unit-holders in the 10 years to April 30. Don't laugh, now. That's actually a surprisingly high hurdle in the benighted U.S. equity category. Globeinvestor.com shows 103 funds in this category with a history going back at least 10 years, and only 28 of them made money over that period on an annualized basis.
We further cut down our list by requiring funds to have returns that ranked in the first or second quartile for the 12 months to April 30. Quartiles divide funds in a category into four groups by performance - one is best and fourth is worst.
Funds are listed here from highest average annual 10-year return on down.
What we found
A sensible conclusion after reviewing this screen is that index investing makes a lot of sense. Of the 19 funds here, eight track such major U.S. indexes as the S&P 500, the Dow Jones industrial average or the Nasdaq. Note that these indexes aren't interchangeable. The S&P 500 contains a broad selection of big U.S. companies, the Dow is limited to 30 heavyweights and the Nasdaq is a tech-dominated index that owes a lot of its recent success to Apple shares.
Index funds are sometimes called passive investments because they robotically track stock indexes. If you prefer active management, there are funds here to suit a variety of tastes. For example, Dynamic Power American Growth takes a fairly aggressive approach that has been strong over all but resulted in a sharp 44-per-cent decline in 2008. A much more conservative choice would be Beutel Goodman American Equity - it has less impressive long-term numbers, but fell just 10.4 per cent in 2008.
Note: Multiple versions are available for several of the funds on today's list. The most widely held, widely available or cheapest versions are shown here.
TOP-PERFORMING U.S. EQUITY FUNDS
|Fund||Minimum Investment ($)||Assets ($ thousands)||MER||12-month return to April 30 (%)||Annualized 10-year return to April 30 (%)|
|TD Nasdaq Index-e||100||n/a||0.51||12.58||6.86|
|Dynamic Power American Growth||500||644.8||3.61||9.43||5.49|
|North Growth U.S. Equity||150,000||n/a||1.20||8.57||4.79|
|SEI U.S. Large Cap Synthetic-O||150,000||117.5||0.17||3.11||3.40|
|GBC American Growth Fund||100,000||134.0||1.95||5.82||3.09|
|TD U.S. Index Currency Neutral-e||100||n/a||0.51||2.90||3.08|
|RBC O'Shaughnessy U.S. Value||500||951.7||1.53||6.45||2.89|
|Altamira US Currency Neutral Index||1,000||148.8||0.65||2.88||2.77|
|RBC U.S. Index Currency Neutral||1,000||252.5||0.70||2.74||2.57|
|CIBC Nasdaq Index||500||58.2||1.24||17.89||2.31|
|Scotia Nasdaq Index||1,000||17.7||1.08||17.60||2.24|
|BMO U.S. Equity ETF||500||79.9||1.15||3.11||1.07|
|Integra U.S. Value Growth||10,000||151.2||1.41||9.10||0.89|
|CI American Managers Corp Class||500||250.6||2.42||4.97||0.67|
|United US Equity Growth Pool-W||500||24.3||0.23||10.15||0.58|
|CI American Value Corporate Class||500||405.8||2.43||2.75||0.33|
|Beutel Goodman American Equity-D||5,000||125.2||1.53||9.42||0.31|
|SEI U.S. Large Co. Equity-O||150,000||1,022.3||0.12||8.66||0.02|
|TD Dow Jones Average Index-e||100||n/a||0.33||9.87||0.02|
© 2007 The Globe and Mail. All rights reserved.
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