Precious Metals & Specialty Funds Rule in November

Precious metals and specialty funds are popping up all over in November's top performers. Looking at the Top 25 Funds for one month as tallied at The Vancouver Sun website, we find nine precious metals funds and five specialty funds, as well as a couple of pharmaceutical trusts, a bear fund and a smattering of others. Not surprising considering the topsy turvy market in November. Note: The Northwest/Marathon Funds do not call themselves precious metals funds but the major holdings for three of them are precious metals. The fourth is resource based with a large stake in Barrick Gold.

Of these Top 25, four of them are managed by Northwest/Marathon and another five by Friedberg Mercantile Group. The Friedberg Group has long managed specialty funds that do well in down markets. Precious metals are one large component of their strategy, as is currency speculation. We profiled the group two years ago when their funds were stellar performers during another market downturn. (Click on link to All Got Fried But Friedberg in the sidebar box above right)

Of course, contrarian funds like these tend to perform poorly during up markets. Only nine funds in the Top 25 have positive one year performance, and most of those are dividend, balanced, bond and equity funds and a couple of pharmaceutical trusts, all clustered near the bottom of the list. The precious metals all had negative one year returns. And of the specialty funds, only two had positive one year results - both Friedberg funds.

The Friedberg Equity Hedge Fund returned 86.68% on the year and was fourth on the list. Its top ten holdings are a mixed bag of largely unknown equities except for their top holding - Amazon.com. But this is not because the fund is long on Amazon, which declined around 50% in November. Their stated objective is to "attempt to capitalize on individual stock situations going both long and short. Make extensive use of leverage. Values of long and short positions are kept at such a proportion as to neutralize, as best as possible, fluctuations that arise solely out of major market trends".

The fund is too new to have a three year track record. And it also requires a minimum investment of US $100,000, putting it out of reach for most investors.

The other Friedberg fund of interest is the Friedberg International Securities Fund which has a one year performance of 26.48%. It invests in international equities, primarily in Asia and the Pacific. But it had a losing year in 1999, when almost everything else was up.

Specialty funds, including bear funds, currency speculation funds, precious metals funds and funds that include short selling amongst its strategies, tend to be a double edged sword. When they're hot, they're hot! And when they're not, they're not. It might be worth holding some as a hedge in your portfolio, but don't bet the farm on them!

Rank	Fund	Type	1 Month	3 Month	1 Year
1	StrategicNova Managed Futures Fund	Specialty	18.67%	21.46%	-3.88%
2	Northwest/Marathon Performance Large Cap Can	Precious Metals	15.98%	12.61%	-5.32%
3	Northwest/Marathon Performance Canadian Balanced	Precious Metals	15.95%	14.18%	-1.42%
4	Friedberg Equity-Hedge Fund	Specialty	14.83%	23.09%	86.68%
5	Marathon Performance N.A. Long-Short Fund	Precious Metals	14.72%	9.80%	-18.09%
6	Northwest/Marathon Performance Large Cap U.S.	Resource	14.15%	16.74%	-1.64%
7	Friedberg Diversified Fund	Specialty	13.94%	1.95%	-41.24%
8	Cambridge Growth Fund	Small Cap	10.00%	5.86%	-22.39%
9	Friedberg International Securities Fund	International	9.11%	21.85%	26.48%
10	Friedberg Futures Fund	Specialty	8.68%	0.32%	-32.62%

Talk about a wipeout! Market weakness decimated our Power Performer charts in November. There were 53 PPs in September, down to 40 in October. But November? Only 4! That's right. Just four funds made our Power Performers table this month. And none were Super Power Performers. It's slim pickin's folks!

Of the four, the best of the lot is the AGF International Value Fund, the only one of the four showing positive numbers for all time frames and a 12% three month return.

With the confirmation of George Dubya as the prez yesterday, maybe the markets are ready now for a turnaround. We watch and wait!