| Monthly Mutuals Analysis |
Dateline: 6/22/98
North American and Asian markets suffered a bit of a shakeout in May, which is reflected in the charts of our Power Performers and our Top 25 for the three month period ending May 31. The number of Power Performers declined from 52 to 42 in May, all of the ones failing to repeat being Canadian or American. And the number of International funds increased from six to seven. (The Templeton International Stock Fund dropped from the list but two Euro funds were added.)
But it's the Three Month Performers that is really striking. The Top 25 to the end of April were a mixed bag with seven being European funds. But this month - wow! Fully 22 of the Top 25 Three Month Performers to the end of May are European!
The best bets of these if you're looking to buy would be the ones that made both the Top 25 Three Month Performers list and the Power Performers list. These are the Dynamic Europe Fund, Fidelity European Growth, Royal European Growth, and Invesnat European Equity.
Why are the European funds doing so well? Simple economics. Europe is moving inexorably closer to a full European common market with freer trade, more competition and a universal currency. In fact, many predict the Eurobuck will rival the American Greenback as the world's reserve currency (despite the loer than expected backing by gold). The result is increased productivity, a sense of optimism and, not surprisingly, a booming stock market.
As I've pointed out in various features over the last two months, there are some signs that the North American markets may be near a top. Personally I'm taking a cautious approach. Although my philosophy had been buy and hold up until recently, I've now opted for a reduced risk strategy. I've put into practice the sell criteria that I apply in my test portfolios here, namely sell if a fund dips 5% from its previous high. I've now moved a fairly large portion of my personal portfolios into cash or money markets.
I even sold a substantial part of my AIC Advantage holdings as the price dropped 5% from its previous high recently. I kept about a third of the shares (I haven't completely shaken the buy and hold approach), but sold the rest. I was heavily overweighted in AIC Advantage and have decided to balance out my holdings a bit more.
I will be re-assessing my holdings during the week and may load up on some more Euro funds. They are the only ones matching my buy criteria right now.
Now on to our portfolio review.
Two of our three portfolios all gained slightly this past month.
The other (Portfolio # 1) declined. Since all are fully invested
and none had funds that dropped 5% during the month, we are
holding all our positions. The charts, then, only show the name
of the investment, the number of shares and the current price.
Portfolio # 1 (Buy Strategy - Fund must be in the Top 25 Performers for a Three Month period and the One Month performance should not be negative nor excessive compared to the Three Month. Sell on 5% slide.)
Portfolio Value at 6/19/98: $ 29,397.86 - up 17.6% since inception (12/22/97)
| Fund | # of Shares (End) | Price (6/19/98) | Value of Investment |
| AGF European Growth | 354.3 | $18.64 | $6604.15 |
| AIM Europa Fund | 300.12 | $20.82 | $6248.50 |
| National Trust Dividend | 270.7 | $20.13 | $5449.19 |
| O'Donnell US Mid-Cap | 663.1 | $8.16 | $5410.90 |
| Standard Life Cdn Dividend | 244.3 | $22.65 | $5533.39 |
| Cash | 151.73 | $1.00 | $151.73 |
Portfolio # 2 (Buy Strategy - Same as Portfolio # 1 plus the fund must have a better than 15% performance for the One Year, Three Year and Five Year periods. Sell at 5% slide)
Portfolio Value at 6/19/98: $ 27,689.07 - up 10.8% since inception (12/22/97)
| Fund | # of Shares (End) | Price (6/19/98) | Value of Investment |
| Associate Investors | 393.6 | $13.81 | $5435.62 |
| Atlas American Large Cap Growth | 150.2 | $35.99 | $5405.70 |
| Ethical North American Equity | 159.3 | $35.67 | $5682.23 |
| Investors US Growth | 111.8 | $51.13 | $5716.33 |
| National Trust Dividend | 270.7 | $20.13 | $5449.19 |
| Cash | 0 | $1 | $0 |
Portfolio # 3 (Buy Strategy - Fund must be a Power Performer and it must have positive Three Month and One Month figures. Sell on 5% slide.)
Portfolio Value at 6/19/98: $ 28,816.10 - up 15.3% since inception (12/22/97)
| Fund | # of Shares (End) | Price (6/19/98) | Value of Investment |
| AGF American Growth | 213.7 | $25.82 | $5517.73 |
| AIC Value | 119.0 | $48.49 | $5770.31 |
| Ethical North American Equity | 159.3 | $35.67 | $5682.23 |
| Fidelity European Growth | 201.8 | $29.69 | $5991.44 |
| Investors US Growth | 114.5 | $51.13 | $5854.39 |
| Cash | 0 | $1.00 | $0 |
Controls: (2 Funds purchased to buy and hold as benchmarks for our portfolios.)
| Fund | # of Shares | Price (6/19/98) | Value of Investment |
| AIC Advantage 2 | 3093.4 | $9.16 | $28,335.54 |
| Trimark Fund | 1137.5 | $23.30 | $26504.89 |
The three portfolios can be characterized as aggressive, conservatively aggressive and conservative. Aggressive Portfolio # 1 retains its lead overall but conservative Portfolio # 3 overtook the benchmark AIC Advantage 2 which lost ground over the month. Portfolio # 2 follows that and conservative benchmark Trimark Fund brings up the rear. Here is a chart of the standings.
| Rank | Portfolio | Last Month Rank | Value | Gain/Loss for Month |
| 1 | Portfolio # 1 | 1 | $29,397.86 | - $267.71 |
| 2 | Portfolio # 3 | 3 | $28,816.1 | + $490.97 |
| 3 | AIC Advantage 2 | 2 | $28,335.54 | - $928.02 |
| 4 | Portfolio # 2 | 4 | $27,689.07 | + $53.51 |
| 5 | Trimark Fund | 5 | $26,504.89 | - $932.79 |
Note that Portfolio # 3, based on my Power Performers, is continuing to gain ground on the leaders. This portfolio was largely in cash for the initial two months as not enough funds filled the buy criteria. Now that it is fully invested, it is outperforming the others having come from the back of the pack to # 2 and moving up smartly.
Marco's Power Performers to May 31, 1998
Top 25 Three Month Performers to May 31, 1998
Funds Performing Better Than 15% Annual Compounded Rate Over 15 Years
Funds Performing Better Than 15% Annual Compounded Rate Over 10 Years
Marco's Power Performers Index Page
Disclaimer: As with all my columns here, I should re-iterate a precaution. I am not a professional financial advisor. I am a financial journalist and editorialist. The views in these columns are my personal opinions.
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