Resource Sector Continues Strong in March

March saw resource and specialty funds shine with a strong showing by small caps as well. Of the Top 25 Funds for one month as tallied at The Vancouver Sun website, nine are resource funds, eight are specialty funds (bear funds, hedge funds, etc.) and six are small caps. The other two are international funds. And of those six small caps, the top three have a heavy weighting in the resource sector.

The top three month performers are also heavily weighted towards resource and specialty funds.

The big question on most people's minds, of course, is what impact will Alan Greenspan's surprise rate cut of April 18th have on the markets in the coming months. Certainly the markets reacted well on Wednesday, immediately soaring - the NASDAQ up 8.1% for the day, the TSE up 4.0% and the Dow up 3.9%. Are the tech stocks now firmly on an upward path again? Will resource stocks peter out as a result?

Some analysts say the surprise rate cut by Greenspan can only mean that he saw some soon-to-be-released economic numbers and they aren't good. Which begs the question - can the rate cut save the economy?

I've been very tentative about a rebound in the near term, but a second straight week of good news on the NASDAQ could well mean investors are ready to wade in again. Meanwhile, the energy sector has certainly not been too shabby. It may be worth taking some profits and sticking a toe back in the tech pot.

Rank	Fund	Type	1 Month	3 Month	1 Year
1	AGF China Focus Class	International	23.18%	26.50%	17.52%
2	Mac Universal World Value Capital Class	International	19.45%	3.11%	n/a
3	StrategicNova Canada Dominion Resource Fund	Resource	16.07%	32.92%	n/a
4	TIP Equity Monetization Class B	Specialty	14.84%	1.76%	n/a
5	MRF 2000 Limited Partnership	Resource	14.17%	22.48%	n/a
6	TDK Resource Fund Inc.	Resource	12.68%	n/a	n/a
7	Multiple Opportunities Fund	Small Cap	11.64%	24.40%	35.21%
8	Resolute Growth Fund	Small Cap	10.88%	23.51%	39.62%
9	Dominion Equity Resource Fund Inc.	Resource	9.85%	24.37%	80.17%
10	Special Opportunities Fund Ltd.	Small Cap	9.32%	21.38%	30.94%

The Resolute Growth Fund remains the one fund making our Power Performers List. It has managed to weather the market downturn through thick and thin. It has made our list consistently every month since March 2000 and has been the only fund on our chart for the last two months. Just what exactly is this fund and why is it so successful?

It is, in fact, the only fund managed by Thomson Kernaghan & Company. It requires a minimum investment of $10,000 and it is only available in B.C., Alberta and Ontario. It is classified as a Small and Mid-cap Canadian Equity Fund by Globefund.

Although a small cap fund, it is very heavily weighted in resource stocks right now. Its top holdings are shown in the table below:

Stock	% of Portfolio
Tethys Energy	14.10%
Courage Energy	9.20%
Canadian Crude Separators	9.10%
Summit Resources	9.10%
Cangene Corporation	9.00%
Danoil Energy	7.60%
Sherritt International	7.60%
Gentry Resources	5.90%

Biotech firm Cangene has made up a large portion of Resolute's portfolio for a long time - sometimes making up over 25% of it. The stock is down from its highs and now contributes a smaller proportion.

The fund was founded and has been managed by Tom Stanley since 1993. It has achieved an average annual return since then of 20.1%. Stanley's philosophy? "I look for inexpensive stocks relative to their growth potential with honest, competent management," he says.

Thomson Kernaghan is one of Canada's oldest independent investment banks and one of the country's top technology underwriters. Besides the Resolute Growth Fund, Thomson Kernaghan also manages the Upper Circle managed fund for high net worth sophisticated investors. Minimum investment: $150,000.

We continue this month with our Strong Performers with a 15% return in each time frame as criteria. Only two funds made that one. Still slim pickin's. (They're included on the same page with the Power Performers.).