BEST Funds Earns its Stars in Globe Investor 1-year Winners

25 February 2008

One-year winners emerging from the turmoil

SHIRLEY WON
swon@globeandmail.com

February 23, 2008

WHAT ARE WE LOOKING FOR?

Star funds emerging from the turmoil plaguing stock markets over the past year.

It was a period that included last February’s global selloff on the heels of a market meltdown in China; the correction last August amid a global credit squeeze, and last month’s pullback on worries about a potential U.S. recession hurting global growth.

TODAY’S SEARCH

We examined the one-year returns of 20 funds to the end of January in all categories [except miscellaneous] in Globefund’s database. We also checked to see which funds stayed in the black last month.

SO WHAT DID WE TURN UP?

The alternative strategies category, which includes hedge funds and some exchanged-traded funds (ETFs), turned up in just over half of the top 20 performers.

CI Global Opportunities (closed to new investors since 1999) and CI Trident Global Opportunities run by Nandu Narayanan had eye-popping returns, respectively, of 115.1 per cent and 97.6 per cent. The bearish manager has been long on commodities like gold, and short on U.S. securities like indexes of securities backed by subprime mortgages.

Sextant Strategic Opportunities managed by Otto Spork was the second-best performer with a robust 69.6-per-cent return. Mr. Sporkhas big bets on resource and water stocks.

Smart calls by these two hedge fund managers kept their funds nicely in the black during last month’s downturn.

Other winners were funds in hot categories such as natural resources and emerging markets. They included ETFs like Horizons Betapro Nymex Oil Bull Plus. This investment, which gives double the daily returns of an index tracking the price of oil, is up 71 per cent.

Claymore BRIC ETF, which invests in stocks of the emerging markets of Brazil, Russia, India and China, posted a 52.1-per-cent one-year return even after stumbling 11 per cent in January. And the iShares Canadian Materials Sector Index rose 31 per cent, including a 4-per-cent gain last month. While many of the top performers, excluding ETFs, are aimed at accredited or high-net
worth investors, the leader among regular mutual funds was Dynamic Power Emerging Markets Fund run by Rohit Sehgal. This fund posted a 28.7-per-cent one-year return. Mr. Sehgal also runs Dynamic Power Hedge Fund and DMP Power Canadian Growth Class, which also made it to the top 20.

Short-term performance, meanwhile, is no guarantee of future returns. But hitting a bonanza over the short term can certainly make the longer-term numbers look prettier.

Stars Over One Year (based on all Asset Classes except Miscellaneous)

Net assets
($-mil) Last reported % return as of Jan.2008
Fund name Asset class (as of Jan’08) MER date MER 1-mo 1-yr 3-yr 5-yr 10-yr
CI Global Opportunities Alternative
Strategies
25.2 1/31/2008 5.86 1.6 115.1 28.1 17.4 17.5
CI Trident Global Opportunities Alternative
Strategies
107.8 1/31/2008 5.21 4.6 97.6 27.5 17.6
HBP NYMEX Oil Bull Plus-A Alternative
Strategies
10/31/2007 2.50 -7.2 71.0
Sextant Strategic Opportunities A Alternative Strategies 5.1 69.6
Claymore BRIC ETF Emerging Markets
Equity
159.0 -11.0 52.1
Marquest Resource Natural Resources
Equity
-6.1 52.0 37.7
Asset Logics Special
Situation
Alternative Strategies -6.4 34.5
iShares CDN
Materials Sector Index
Natural Resources
Equity
186.7 1/31/2008 0.55 4.4 31.0
HBP U.S. Dollar Bear
Plus-A
Alternative
Strategies
10/31/2007 2.50 -2.3 30.7
Dynamic Power
Emerging Markets
Alternative Strategies 86.0 6/29/2007 11.24 -9.4 28.7
Fidelity Focus
Natural Resources-A
Natural Resources
Equity
14.5 9/28/2007 2.77 -6.8 25.3 19.8 17.7 10.6
Dynamic Power Hedge
Fund – F
Alternative
Strategies
373.4 6/29/2007 13.94 -14.7 24.6 45.2 50.3
Sprott Hedge L.P. Alternative
Strategies
564.0 12/29/2006 7.28 -2.4 24.4 18.8 14.8
Quorum Secured
Equity Trust
Cdn. Small or Mid
Cap Eq.
-4.9 24.2 8.6
Sprott Bull/Bear RSP Alternative
Strategies
90.4 12/29/2006 10.49 -2.4 23.5 18.0 14.2
BMO Resource Natural Resources
Equity
331.5 9/28/2007 2.30 -0.6 21.3 32.8 27.7 16.0
SciVest Commodity
Index Plus
Alternative
Strategies
1.3 21.0
DMP Power Canadian
Growth Class
Canadian Focused
Equity
6.9 6/29/2007 3.10 -6.8 19.8
B.E.S.T. Discoveries I Retail Venture
Capital
56.0 9/28/2007 5.72 -0.4 19.8 6.4 1.4 0.9
Caldwell Exchange Global Equity 28.9 1/31/2008 2.75 -8.7 19.5
S&P/TSX Total Return -4.7 3.5 15.2 17.3 8.9
S&P 500 Composite Total Return Idx($Cdn) -4.7 -17.0 0.0 3.0 1.4
MSCI Emerging Markets Free ($ Cdn) -10.6 5.6 20.9 23.2 9.8

Note: Data on assets and management expense ratio (MER) is not available for some investments on Globefund.

SOURCE: GLOBEFUND

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