Monthly Mutuals
Analysis Last month on this page I wrote "technology stocks are making a comeback and it would not be surprising to see tech funds edge out the bear and precious metals funds for top spots in October." Was I ever right in spades! Of the Top 25 funds for the month as reported at The Vancouver Sun's Top Funds page, 24 were technology funds. That's right - 24 out of 25 funds. The remaining fund (which also happens to be the top performing fund for October) is the TIP Equity Monetization Class B, which is an international equity fund. And look at those numbers! The one month increase for those 25 funds ranged from 19.52% to 38.74%. But if we look at the one year figures for those that have them, they are all down between 41.20% and 74.47% which indicates that they have a long way to go to regain their old highs! Let's take a quick look at the #1 fund - the Tip Equity Monetization Class B Fund. The goal of this actively managed hybrid fund is to emulate the Morgan Stanley World Index. It is designated as an international equity fund by Globefund, but as an alternative strategies fund by Fund Library. Both are correct. Because it tries to emulate a global equity index, it can be considered a global equity fund. But because the fund also uses "an option proprietary program for hedge protection that is activated when and if the underlying markets justify its use at predetermined levels," it as a specialty fund. Nevertheless, management considers the fund conservative. The fund doesn't invest directly in shares, but rather in a basket of equity indexes. It can vary the mix as conditions dictate. An interesting feature is that the company offers three-to-one leveraging for the Class B fund with "investment risk limited to the original capital only". There's a $10,000 minimum investment. Both the Equity Monetization Fund and TIP Funds other fund, the Alternative GIC Fund, are tax-advantaged. Check out their website for more information. It's also worth noting that the next six top performing funds in October all come from AIC's stable with increases ranging from 28.75% to 35.27%. A quick look at the top holdings for these six funds show that many are invested in the same things, more or less. The top holding for all of them is International Rectifier Corporation. Hedge funds, precious metals and bond funds still dominate the top three month performers. Here are the Top Ten Funds in October:
Power Performers
After four months without a Power Performer, we're pleased to finally see some again. In fact, we even have one Super Power Performer for October! That's the relatively unknown Goodwood Fund. Unfortunately, it requires a $150,000 minimum investment, out of reach for most investors. In fact, large minimums seem to be de rigeur for the funds making our lists. The McElvaine Investment Trust also requires a $150,000 minimum. And Resolute Growth requires a $25,000 minimum - a bit more reasonable, but still a fair chunk of change to plunk into one fund. But given its superlative track record over the past few years, That may not be a bad basket to put a lot of your eggs in! The two Fidelity funds in our lists require only a $500 minimum - a bit more digestible for most investors. Last month I said the future direction of the market was too tough to call. Now I've upped that to mildly bullish. There are many positive indicators right now. Nevertheless, a hedge position in a solid precious metals fund is still sound - particularly one with equity exposure. Gold stocks have been greatly outperforming the metal itself and the increasing consolidation in the industry (Newmont made a bid for both Normandy and Franco-Nevada Wednesday), make such a fund a solid investment with superb upside if the price of gold rallies. |