Monthly Mutuals Analysis
Dateline: 5/17/99
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Today's feature is my Monthly Mutuals Analysis. I try and get this one out ahead of the newspaper coverage of the subject. When I started this monthly feature I developed a unique way of analysing funds I call Marco's Power Performers. This is a monthly chart of the mutual funds returning better than 20% for each of the one year, two year, three year and five year periods. It reports which funds are doing well long term as well as short term and which are performing consistently. Although it can be skewed by back-end bias, for the most part, this is an effective way of charting the top performing funds.
Now on to this month's report!
Looking at the Top 25 mutual funds for April we find that Asian funds and Resource funds dominated the list with fully fourteen Asian/emerging market funds and eight energy/resource funds. The other three were two small caps and a German fund.
The Three Month chart reflects a similar trend with six Asian funds, ten Latin American funds, three global/emerging market funds and five energy/resource funds. The lone fund not in any of these categories is the Altamira e-business Fund which has been on a tear since start-up.
The National Post reported Saturday that Natural Resource funds as a whole did the best for April, followed narrowly by Asian & Japanese funds. The Resource sector was up 14.5% and the Asians were up 13.9%. The Latins came in third, still performing strongly with an average 10.5% gain for the month.
This continues the trend from March when Resource funds first jumped into the ranks of the top performers. Analysts such as Canaccord's Brent Woyat note a momentum shift to the small caps as well as continued strength in the resource sector. "The small to mid cap stocks are now emerging from a 12-month bear phase, offering greater upside potential from current levels," he says, and "Cyclical and resource stocks should also continue to attract money flows as the price trends within the sector are positive".
If you don't already have any resource or Asian exposure, you may want to give it some consideration.
The Power Performers Report
The number of Power Performers dropped slightly from 17 to 14 in April, but the number of Super Power Performers gained one. The 20/20 Aggressive Growth Fund joined AGF American Growth, BPI American Equity Value, Ethical North American Equity and MD U.S. Equity in our elite group of funds that have returned better than 25% in each of the relevant time frames.
The three funds dropping off the list this month included two sectoral funds, AIM Global Health Sciences and Green Line Science & Tech. This reflects a bit of a setback in the tech sector. The Green Line fund is just barely off the list because it only returned 19.56% for three years instead of our required 20%.
The Power Performers remain exclusively American Equity Funds. Half of the fourteen funds making the list actually declined in April, including the technology laden Ethical North American Equity Fund which declined 7.4%. But its strong past track record keeps it in the Super Power Performers list. It will be interesting to see if this fund rebounds. Manager Cynthia Frick is one shrewd stock trader and I expect it will.
Our RRSP Performers were reduced to only one fund for March but have come back with three for April. NN Can Am and the Transamerica Agent Plan join Scotia CanAm Stock Index Fund in this select group. The Scotia and NN funds focus on the American market and qualify as Canadian content in your RRSP because of their use of derivatives. The Transamerica plan is largely invested in Canadian stocks, including such top performers as TD Bank, JDS Fitel and Metronet.
If the markets continue to reach new highs in the next two weeks, we can expect more funds to make the RRSP Performers list next month.
Fully 31 funds made our list of funds doing better than 15% a year for ten years in April, and ten made our list for the fifteen year period.
Marco's Power Performers Index Page
Marco's Power Performers to April 30, 1999
Marco's RRSP Performers to April 30, 1999
Top 25 Three Month Performers to April 30, 1999
Funds Performing Better Than 15% Annual Compounded Rate Over 15 Years
Funds Performing Better Than 15% Annual Compounded Rate Over 10 Years
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.
Investing (Canada) Notes:
I am now posting my Power Performers and other charts using About.com's standard page format instead of full page charts as I have done before. While this introduces a greater consistency in page appearance, it does not lend itself well to printing for those of you who may have liked to print off our charts. So I am creating a special mailing list and will e-mail our new charts as they appear each month in a format you can print without the ads, headers, links and that picture of my smiling mug. So if you want to get on the list, e-mail me.
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