Funds fly under the radar
I often come across funds that are doing exceptionally well but are flying under the radar screen of most investors. Here are three examples.
AIC Canadian Focused Fund. There’s not much to cheer about at AIC these days. The company has experienced heavy redemptions due to the poor performance of many of its funds, but this one is an exception. Manager James Cole has guided it to a one year gain of 23.1 per cent (to Nov. 30) through some judicious stock picking.
Financial service companies like Manulife and TD Bank dominate the top holdings, along with energy giants like Suncor and Canadian Oil Sands Trust. Risk is better than average for the category. This is one of AIC’s best choices right now. Rating: $$$ (out of four).
Dynamic Power American Growth Fund. Manager Noah Blackstein, who calls the shots here, is considered to be one of the rising stars at Dynamic and he is showing why with this fund. Despite the handicap of the rising loonie, he recorded a gain of 11.5 per cent in the year ending Nov. 30, thanks to some great stock-picking.
His winners include Apple Computer, which has shot up from the US$20 rge at the start of 2004 to more than US$65, and Google, which rose from its August IPO price of US$100 to US$180 in late November ’04. Volitality is on the high side, however, so be aware of that. I have added this fund with a $$$ rating.
Sceptre Equity Growth Fund. Manager Allan Jacobs went through a rough time from 1998 to 2000 but he has come back with a vengeance. This fund gained an eye-popping 66.7 per cent in 2003 and has added another 17 per cent in the first 11 months of 2004. That pulled up the three-year average annual compound rate of return to 33.1 per cent, way above average for the Canadian Equity category. Jacobs looks for companies with strong earnings growth and momentum, superior management, good profit margins, and strong balance sheets.
In late 2004, his portfolio was heavily weighted to industrial products and energy, with large positions in companies such as Reitmans, Peyto Energy Trust, PetroKazakhstan, and RONA. Volatility is a on the high side but this fund has once again become a good choice for investors. Rating moves up to $$$$, making this a top pick.