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Mutual Fund News

Top global fund bets big on U.S.

jnelson@globeandmail.com

What are we looking for?

Canada's top performing global equity funds in the past year.

The screen

We looked for the 15 funds that posted the best annualized returns in the category for the year ended July 31, 2013. U.S. dollar, segregated and duplicate versions were excluded, as well as those closed to new investors.

Funds in this category are able to invest anywhere in the world and must invest more than 10 per cent, but less than 90 per cent, of their equity holdings in Canada or the United States.

What did we find?

The global shakeup that is causing volatility in emerging markets hasn't changed the strategy for the Manulife Special Opportunities Class fund. And one of its portfolio managers says he doesn't expect the fund's predominantly U.S. holdings to change any time soon.

With an annualized return of 49.4 per cent in the period, this fund nabbed the top spot on the chart.

Portfolio manager Dennis McCafferty is primarily interested in below-investment-grade companies. This strategy makes the fund different than some of the others in the category. "There will always be companies that are challenged and we think that the investment set is very large for us right now," he said.

Most of those opportunities have been stateside; while the fund is always looking globally, about 80 per cent of investments are currently U.S.-domiciled.

Mr. McCafferty has identified media and commodities sectors as hot spots for recent investment returns, as well as some large capitalization stocks such as General Motors Co.

The fund has recently reduced its risk profile somewhat. "The portfolio is more diversified than it was a couple of months ago," he said. The top 10 holdings make up less of the fund as the manager pares back on some of the companies that have outperformed.

The second-best performer, EdgePoint Global Portfolio FE, which had gains of 41.3 in the period, also depends heavily on U.S. investments for returns. The third-ranked fund in the screen, IA Clarington Global Opportunities Fund A, is more diverse than its top-two rivals, with its Chinese and U.K. investments nearing the size of its U.S. holdings.

*****

GLOBAL EQUITY FUNDS - 1 YEAR TO JULY 31, 2013

% return (July 31)% returnAssets
Fund1-yr3-yr5-yr10-yr20122011201020092008MER($-mil)
Manulife Special Opport Class49.4%38.0%2.6816.6
EdgePoint Global Portfolio FE41.3%16.4%11.1%-2.7%8.0%28.2%2.22731.0
IA Clarington Global Opport Fund A39.7%7.1%2.7%2.9%4.4%-9.0%8.1%15.3%-28.1%2.56100.6
Mackenzie Cundill Value 'C'36.6%10.0%4.4%6.0%14.9%-16.1%9.5%14.7%-25.3%2.542,990.5
IG Mackenzie Cundill Global Value-A35.6%9.5%3.9%14.6%-16.2%8.7%14.0%-25.5%2.71*139.5
Black Creek Global Leaders A35.0%12.0%8.4%20.0%-14.8%12.2%23.2%-20.4%2.59448.0
RBC O'Shaughnessy Global Equity32.1%11.7%0.0%15.0%-12.2%11.8%4.1%-38.1%2.2680.5
Fiera Sceptre Global Equity Class B31.9%16.0%3.9%2.8%14.0%2.7%2.7%11.2%-34.4%1.906.0
AGF Global Value30.4%5.8%-1.3%-0.9%16.4%-13.3%-3.7%11.0%-36.9%3.00467.7
TD Global Value-I30.0%10.7%1.6%11.8%-4.7%1.4%3.2%-28.9%2.6813.0
Templeton Growth Fund Ltd.29.7%12.5%3.6%3.7%14.3%-5.0%2.8%11.3%-30.0%2.521,243.8
Stone & Co. Flagship Global Growth A29.6%12.8%5.5%4.1%15.1%-6.0%9.3%18.5%-28.8%2.9230.0
Dynamic Global Value Fund29.4%3.8%1.7%5.9%21.1%-23.3%10.3%47.3%-43.8%2.46614.8
Brandes Global Equity29.2%9.1%-0.3%0.7%7.8%-5.4%0.9%0.7%-33.5%2.77756.0
TD Global Growth Fund-I29.1%11.4%4.4%3.9%13.6%-10.5%3.5%15.5%-27.2%2.5596.1
S&P 500 Composite Total Return Idx($Cdn)28.4%17.7%8.3%4.3%13.5%4.4%9.4%8.1%-21.9%
S&P/TSX Total Return10.5%5.1%1.3%8.3%7.2%-8.7%17.6%35.1%-33.0%
MSCI EAFE24.0%9.1%1.5%8.5%17.9%-11.7%8.2%32.5%-43.1%
* Assets as of June 30, 2013. Source: Lipper

© 2007 The Globe and Mail. All rights reserved.

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