| Monthly Mutuals Analysis |
Dateline: 2/15/99
Although the number of Power Performers is down to 28 from 31 in January, the number of Super Power Performers (funds doing better than 25% per year for the one, two, three and five year periods) is up from five to seven. Meanwhile, the number of RRSP Performers has increased to seven of which four are also Power Performers. As usual, you'll find links to all of my charts at the end of this page.
Checking out the Top 25 One Month Performers for January we find that it was a strong month for Technology and Communications funds. All except eight were in this category. Two of the Friedberg funds were number one and three respectively with the Friedberg Currency Fund gaining 45.6%. But the real surprise is that the number two fund for January was the Canadian Venture Opportunities Fund, a labour sponsored venture capital company with a gain of over 30% for the month. The LSVCCs are all heavily tax advantaged but many analysts consider them to be poor investment vehicles in spite of that. If small caps are making a comeback as some think, then maybe these funds may turn out to be not such a bad investment after all.
Looking at the Three Month Performers we find that again, tech funds rule with fifteen of the Top 25. Techs numbered twelve the month before.
The past week has led to some concern as the the technology laden NASDAQ got beaten back 2.2%, but if one considers the huge gains made in January, the retrenchment can be looked on as a reasonable correction. Nevertheless, there are bearish rumblings. Carlton Lutz of the Cabot Market Letter urged his readers on Feb. 2 to start converting some of his earlier recommendations to cash and to hold off on new purchases. Lutz is a momentum analysts and swings between bullish and bearish pronouncements based on market fundamentals. Although his specific market picks are available only to subscribers, he updates his general market commentary twice weekly at his website.
On the other hand, Jeff Walker, another momentum analyst with his Walker Market Letter, reports in his Feb. 7 emailed letter that his Lowrisk Market Allocation Model has a signal strength of 14. Of his four portfolios, two are 100% in equities. The Super Bear Strategy is 100% in money markets and the one I find most useful, the Graduated Strategy, is 75% equities, 25% money markets.
Given these recommendations from Lutz and Walker, concerns about Y2K and a general concensus that the market is overvalued, some cash on the sidelines is not unwise. In fact, our portfolios each had several funds sold by our criteria, resulting in a strong cash position in each. At the same time, I'm no pessimist and think there may be another upsurge in the market before we see a substantial decline. The big question is when.
Two months ago we noted that the Cambridge American Growth Fund had a spectacular leap and was the year's best performing fund with over 100% return. At the time I expressed skepticism about this fund as an investment vehicle because the spectacular increase was generated over such a short period. The Top Ten Holdings for the fund, as reported by Globefund were blue chip stocks, nothing unusual and I speculated that they must have made their gains with their lesser holdings. That turned out to be correct as Sagit now shows the holdings as of Dec. 31 as 44.44 % Aquaplan, 14.55% Dragon Pharmaceuticals and a further 9.51% in National Challenge Systems, all relatively obscure stocks.
Aquaplan used to be called AMEE Inc. and changed its name and stock symbol in December to Aquaplan and AQPL, moving from the NASDAQ to the OTC. Thinly traded (only 4000 shares changed hands Friday), Cambridge will likely have difficulty trying to divest itself of this waste water treatment company from Germany. Beware!
Now on to our portfolios.
Our portfolios all did well through January, but February so far has proven to be a damper on things. All three portfolios saw some holdings decline by more than 5%, resulting in their sale according to our formula. The summaries are given below. Only one fund met our buy criteria resulting in large cash positions in each.
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 2/12/99: $29,127.49 - up 16.5% since inception (12/22/97)
| Fund | # of Shares | Buy/Sell | New Total | Price | Total |
| Altamira Global Bond | 408.63 | Sell | 0 | $10.83 | ($4425.46) |
| Optima Strategy Global Fixed Income | 651.04 | Sell | 0 | $7.65 | ($4980.45) |
| C.I. Sector Global Technology | 226.68 | Sell | 226.68 | $21.73 | ($4925.75) |
| CIBC Global Bond Index | 459.07 | Hold | 460.73 | $10.77 | $4944.18 |
| First Canadian International Bond | 449.57 | Hold | 449.57 | $10.82 | $4864.43 |
| Green Line Global Government Bond | 409.46 | Hold | 409.46 | $12.18 | $4987.22 |
| Cash | n/a | Add | $14,331.66 | $1.00 | $14,331.66 |
The Altamira fund was sold on Feb. 12, the other two on Feb. 5.
Portfolio # 2 (RRSP Portfolio) (Buy Strategy - 80% of funds must be 100% RRSP eligible. Fund must be a Power Performer or an RRSP Performer and must have positive Three Month and One Month figures. Sell at 5% slide)
The formula for picking funds for this portfolio changed in December 1998 to make it RRSP compliant. This month we sold off three funds and bought one as per our criteria.
Portfolio Value at 2/12/99: $28,549.28 - up 14.2% since inception (12/22/97)
| Fund | # of Shares | Buy/Sell | New Total | Price | Total |
| Ethical North American Equity | 125.42 | Sell | 0 | $43.05 | ($5399.33) |
| Canada Trust Amerigrowth | 449.46 | Sell | 0 | $11.20 | ($5033.95) |
| Global Strategy Div. Europe | 254.78 | Sell | 0 | $19.06 | ($4856.10) |
| NN Can-Am | 482.89 | Hold | 482.89 | $10.74 | $5186.24 |
| Scotia CanAm Stock Index | 417.85 | Hold | 417.85 | $12.44 | $5198.05 |
| Chou RRSP | 0 | Buy | 271.88 | $18.39 | $5000.00 |
| Cash | 2875.61 | 10,289.38 | 13,164.99 | $1.00 | $13,164.99 |
The Global Strategy fund sold on Feb. 12, the other two on Feb. 5. The Chou RRSP was bought on Feb. 12.
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.)
Again we end up selling two of our funds and retaining the proceeds as cash as no Power Performer meets our buy criteria.
Portfolio Value at 2/12/99: $31,207.04 - up 24.8% since inception (12/22/97)
| Fund | Prev. Shares | Buy/Sell | New Total | Price | Total |
| AGF American Growth | 161.60 | Sell | 0 | $33.20 | ($5365.12) |
| Ethical North American Equity | 125.42 | Sell | 0 | $43.05 | ($5399.33) |
| AIM Global Health Sciences | 316.74 | Hold | 316.74 | $17.47 | $5533.39 |
| Investors U.S. Growth | 89.81 | Hold | 89.81 | $54.62 | $4905.42 |
| IRIS U.S. Equity | 112.23 | Hold | 112.23 | $45.21 | $5073.92 |
| Metlife MVP U.S. Equity | 147.16 | Hold | 147.16 | $33.50 | $4929.86 |
| Cash | 0 | Add | $10,764.45 | $1.00 | $10,764.45 |
The AGF fund sold on Feb. 12, the Ethical fund on Feb. 5.
Controls: (2 Funds purchased to buy and hold as benchmarks for our portfolios.)
| Fund | # of Shares | Price (2/12/99) | Value of Investment |
| AIC Advantage 2 | 3093.4 | $8.14 | $25,180.27 |
| Trimark Fund | 1160.28 | $21.88 | $25,386.92 |
All the portfolios made gains for the month with #2 and #3 making particularly impressive gains. Portfolio #1 which is heavy on bonds was the weakest. The rankings are below.
| Rank | Portfolio | Last Month Rank | Value | Gain/Loss for Month |
| 1 | Portfolio # 3 | 1 | $31,207.04 | -$444.25 |
| 2 | Portfolio # 1 | 2 | $29,127.49 | -$1265.74 |
| 3 | Portfolio # 2 | 3 | $28,549.28 | -$510.46 |
| 4 | Trimark Fund | 5 | $25,386.92 | -$719.48 |
| 5 | AIC Advantage II | 4 | $25,180.27 | -$1639.51 |
Marco's Power Performers to Jan. 31, 1999
Marco's RRSP Performers to Jan. 31, 1999
Top 25 Three Month Performers to Jan. 31, 1999
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. The author may hold interests in a number of the funds mentioned in this article.
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