Clean environment – time to go?

Question: When is enough, enough? I understand and subscribe to the idea that you invest for the long term and I know that, statistically, the market tends to come out positively in the long run. I’ve been holding some units of Clean Environment Canadian Equity for the last few years. This fund is now managed by Acuity. I have seen the value of that fund do miserably, especially over the last year. This fund is back-loaded on a decreasing rate. I understand that some of the poor performance is due in a good part to the beating that ATI has been taking on the market, but when and how do you decide, on a fundamental basis, when the time has come to dump the investment and take your losses and move on to something else?


The performance of this fund has indeed been disappointing. Over the two years to Jan. 31, the average annual compound rate of return is marginally in the red, by 0.8%. However, there is a ray of hope. Recent performance has improved significantly and the fund showed a big gain of 27.1% for the three months to the end of January. You have to make your own individual investment decisions, but give this development I would be inclined to it a little longer before incurring a back-end load and dumping it.

As a general rule, if a fund underperforms the averages for more than six consecutive quarters, it’s time to take a close look and decide whether you want to stay on.