Personal Finance

Mid-year mutual fund rankings

JOHN SCHOFIELD August 4 1997
Personal Finance

Mid-year mutual fund rankings

JOHN SCHOFIELD August 4 1997

Mid-year mutual fund rankings

Personal Finance

Can Jonathan Wellum do no wrong? For five years running, the Burlington, Ont.-based president of the AIC Group of Funds has managed the country’s hottest Canadian equity mutual fund. Riding the longest bull market in history, his sizzling AIC Advantage Fund posted an average annual return of 39.8 per cent between 1992 and 1996, making it a star performer in this year’s Maclean’s/BellCharts mutual fund rankings (“The best and worst mutual funds,” Jan. 27). Halfway through 1997, Wellum and his team are on track to repeat their gold-medal performance, with a 35.6-percent gain in the six months ending on June 30. AIC’s Advantage II Fund—launched last October when AIC’s Advantage I Fund was closed to new investors— finished a close second. With such an impressive track record, Wellum finds himself reminding fans that he is only human. “Investors’ expectations are too high,” the 36-year-old Wunderkind says. “There’s an inevitability to the market, and people should expect some back-up in prices at some point.”

The warning comes too late for Canadians with money in precious metal and resource funds. Most gold funds plummeted in the first half of the year as bullion prices drifted steadily lower. Funds weighted heavily towards junior mining stocks were further bruised by the debacle surrounding Calgary’s infamous Bre-X Minerals Ltd.

Overall, though, Canada’s mutual fund frenzy continues unabated. Investors poured $30 billion into mutual funds during the first six months of 1997, boosting industry assets to $258.4 billion. Investors in Canadian equity kinds were rewarded with an average 9.3-percent return, slightly worse than the 9.6-per-cent rise in the benchmark Toronto Stock Exchange 300 index over the same period.

The real stars, however, have been European and emerging-market funds. The average European fund jumped 12.9 per cent in the past six months. Standouts, such as Global Manager’s German Geared fund, have gained more than 40 per cent.

The flood of money into funds has left many experts wondering when the good times will end. “While we are not yet at the financial-bubble stage, we are not far from it,” says Mark Holowesko, manager of Templeton Growth.

None of that seems to worry Wellum. He says AIC is focused on the long term—and investors should be, too: “If you’re chugging along on a savings plan, the idea of a correction should not deter you. Definitely do not, do not sell when the market goes down.” For Canadians trying to save for their retirements, that advice could prove golden.

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Maclean’s/BELLCHARTS RANKINGS

CANADIAN EQUITY*

Best 6-month return:

AIC Advantage Fund AIC Advantage II Fund CDA Special Equity Quebec Growth Fund Fonds d’investissement REA

Worst 6-month return:

Cambridge Precious Metals Cambridge Special Equity CIBC Precious Metals Global Strategy Gold Plus Cambridge Resource Fund

Assets

(millions) 6 mth. 1 yr.

$4.2

$6.5

$35.2

$103.2

$19.6

-35.6

-35.5

-29.9

-28

-27.7

-48.7

-47.1

-25.5

-40.3

3 yr. 5 yr.

$1,711 35.6 82.9 46.9 35.4

$2,010 31.5 — — —

$7.4 22.9 — — —

$14.2 22.6 46.8 21.2 19.2

$46.1 22.1 29.7 13 —

-7.3

7.6

-2.7

4.2

17.4

* Includes Canadian small-to-mld cap, dividend and specialty funds, which are 100-per-cent RRSP eligible

U.S. AND NORTH AMERICAN EQUITY

Best 6-month return:

Assets

(millions) 6 mth. 1 yr. 3 yr. 5 yr.

Cambridge American Growth $0.5

Global Manager U.S. Geared $0.3

AIC Value Fund $537.5

Co-operators U.S. Equity $5.3

McLean Budden Pooled American $148.9

Worst 6-month return:

Global Manager U.S. Bear $1.2

GT Global American Growth $18.8

Universal U.S. Emerging Growth $316.6 AGF Special U.S. Class $148.4

First American Fund $10.3

35.7

31.7

27.7 26.9 25.2

-12.9

-5.5

-3.8

0.5

0.7

28.8

56.6

57.1

38.7

41.1

3.8

35

37.8

29.2

-19.4 —

3.9 —

-6.7 23.8

2.5 11

-5.2 1.2

3.5

27.8

21.1

23.2

12.2 5

GLOBAL EQUITY*

Best 6-month return:

Global Manager German Geared Diversified Latin American 20/20 Latin American Navigator Asia-Pacific Fidelity Latin American Growth

Worst 6-month return:

Global Manager German Bear Allstar Adrian Day Gold Plus Cambridge Global Fund Dynamic Global Precious Metals Friedberg Currency Fund LP

Assets

(millions) 6 mth. 1 yr. 3 yr. 5 yr.

$0.3

$31.9

$354.7

$8.3

$198

I

$0.5

$0.3

$1.4

$33.5

$44.2

45.4

43.4 43.3 41.2

39.5

-32.3

-28.3

-24.5

-21.2

-18.8

70.2 46.1

67.3 57.5

43.3

-40.1

-45.1

-1.6

10.7

11.2

23.8

9.3

-13.7

-3.7

' Includes European, Far East, Emerging Markets/Latin American and specialty funds, which are not 100-per-cent RRSP eligible

JOHN SCHOFIELD