| Monthly Mutuals Analysis |
Dateline: 8/24/98
The weakness in equity markets took its toll on our Power Performers in July, reducing the number to 28 from 38 to the end of June. The most notable victim of the carnage was AIC Advantage which had been a Power Performers consistently for over a year. Its one year performance fell to 16.23%, dropping it from the list. Canadian Equity funds were completely wiped off the chart.
In fact, the only sub-group to gain was the International funds which gained two funds for a total of nine Power Performers, and every one of those was a European fund. Two of the European funds are now Super Power Performers with a compounded annual growth rate of over 25% for each of our one year, two year, three year and five year time periods.
There are four newcomers to the list - the London Life U.S. Equity Fund, the National Trust American Equity Fund, the AIM Europa Fund and the Altamira European Fund. The IRIS U.S. Equity Fund is not really a newcomer but a renamed merger of the former Cornerstone U.S. Fund and the Trust Pret & Revenu American Fund. (Globefund keeps tabs on fund name changes and new funds at its website.)
And while the number of Power Performers took a beating in July, the worst was yet to come. Early August saw a stiff correction on the equity markets with many funds falling several percentage points. How it affects the number of Power performers, of course, won't be known until next month's analysis. But take a look at our portfolios to see what the stock market blues did there!
There's an old instrumental standard that the Ventures recorded on one of their albums called Slaughter on Tenth Avenue. Now I don't think the early August market correction can really be called a slaughter on Wall Street, but it certainly took an axe to our portfolios. As you know, the buy criteria for our three portfolios vary. But the sell criterion is the same for each one. Specifically, we will sell a fund if it drops five percent or more from its previous high.
Since our last Monthly Mutuals Analysis we have sold every single one of our holdings. I only chart the funds once a week, after the Friday market close. So to allow for response time and market fluctuations between the placement of a sell order and the actual sale, I'll take the closing price for the week in which the fund is sold as the selling price. Let's check each portfolio in detail.
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 8/21/98: $ 29,482.746 - up 17.9% since inception (12/22/97)
| Fund | Sale Date | # of Shares | Price | Proceeds of Sale |
| AGF European Growth | Aug. 7 | 354.3 | $18.64 | $6604.15 |
| AIM Europa Fund | Aug. 14 | 300.12 | $22.11 | $6635.65 |
| National Trust Dividend | July 31 | 270.7 | $19.18 | $5192.03 |
| O'Donnell US Mid-Cap | Aug. 7 | 663.1 | $8.17 | $5417.53 |
| Standard Life Cdn Dividend | July 24 | 244.3 | $22.44 | $5482.09 |
| Previous Cash on Hand | 151.73 | $1.00 | $151.73 | |
| Total Cash | $29,483.18 |
Looking at our Three Months Performance Chart we see that all 25 funds are potential buys as none have negative one month numbers. However, all of them have either declined from their July 31 valuations, or are unavailable for other reasons, and so we stay in cash for now.
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 8/21/98: $ 27,875.61 - up 11.5% since inception (12/22/97)
| Fund | Sale Date | # of Shares | Price | Proceeds of Sale |
| Associate Investors | July 31 | 393.6 | $13.30 | $5234.88 |
| Atlas American Large Cap Growth | July 31 | 150.2 | $36.28 | $5449.26 |
| Ethical North American Equity | July 31 | 159.3 | $38.67 | $6160.13 |
| Investors US Growth | Aug. 7 | 111.8 | $52.23 | $5839.31 |
| National Trust Dividend | July 31 | 270.7 | $19.18 | $5192.03 |
| Total Cash | 0 | $1 | $27,875.61 |
Since no funds were eligible for purchase with Portfolio # 1, the same is true for Portfolio # 2 with its more stringent requirements. We stay in cash.
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 8/21/98: $ 29,977.70 - up 19.9% since inception (12/22/97)
| Fund | Sale Date | # of Shares | Price | Proceeds of Sale |
| AGF American Growth | Aug. 7 | 213.7 | $27.88 | $5957.96 |
| AIC Value | Aug. 7 | 119.0 | $47.68 | $5673.92 |
| Ethical North American Equity | July 31 | 159.3 | $38.67 | $6160.13 |
| Fidelity European Growth | Aug. 7 | 201.8 | $30.75 | $6205.35 |
| Investors US Growth | Aug. 7 | 114.5 | $52.23 | $5980.34 |
| Cash | 0 | $1.00 | $29,977.70 |
But with the Power Performers, the situation is a bit different than with the other two portfolios. Although we did liquidate the entire portfolio, there is one fund that recovered nicely from the blip in early August and hence fits our "buy" profile. It is the AIM Global Health Sciences Fund, of which we buy $5000 worth. The rest stays in cash.
Oddly enough, I started a new portfolio for my other web page at Investor 1 using Thursday's closing prices. With that portfolio there were four buys. Three of them were borderline buys with values just slightly above the July 31 close and by Friday's close they had dropped enought to negate them as buys for this page. Check out that page for details. Meanwhile, here is a chart of our new position for Portfolio # 3.
| Fund | # of Shares | Price (8/21/98) | Value of Investment |
| AIM Global Health Sciences | 303.21 | $16.49 | $5000.00 |
| Cash | n/a | n/a | $24,977.70 |
Controls: (2 Funds purchased to buy and hold as benchmarks for our portfolios.)
| Fund | # of Shares | Price (8/21/98) | Value of Investment |
| AIC Advantage 2 | 3093.4 | $8.47 | $26,201.10 |
| Trimark Fund | 1137.5 | $22.14 | $25,184.25 |
The three portfolios can be characterized as aggressive, conservatively aggressive and conservative. Conservative Portfolio # 3 surged ahead to lead the pack this month. Aggressive Portfolio # 1 slipped back to second spot and the benchmark AIC Advantage 2 is in third. 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 # 3 | 1 | $29,977.70 | - $1938.03 |
| 2 | Portfolio # 1 | 2 | $29,483.18 | - $1604.28 |
| 3 | Portfolio # 2 | 4 | $27875.61 | - $1614.48 |
| 4 | AIC Advantage II | 3 | $26,201.10 | - $4825.70 |
| 5 | Trimark Fund | 5 | $25,184.25 | - $2776.71 |
Note that the two benchmark funds, because they weren't sold to limit losses to 5%, suffered badly. The AIC Advantage II lost almost $5000 - a decline of 15.5%! But if the market recovers, they will recoup some of their value while our portfolios languish in cash.
Marco's Power Performers to July 31, 1998
Top 25 Three Month Performers to July 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
Globefund's Update on New Fund Listings
Southam News's Top 25 Mutual Funds Charts
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. The author holds interests in a number of the funds mentioned in this article.
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