Investment fund performance since the start of 2007LinkedIn
There, in black and white
NB Bulletin Vol. 10 N. 10, August 2007
We are pleased to present our mid-year review analyzing the performance as at June 30, 2007, of managers comprising the Normandin Beaudry Investment Funds Universe. The goal of this review is to keep you up-to-date on the recent performance of financial markets and institutional managers. You will receive this review each year after the end of the first half year.
All managers included in the Normandin Beaudry Universe must adopt an active portfolio management approach, have a performance history of at least three years and manage a minimum of 300 million dollars in assets. All performance statistics are presented before management fees.
The median return for balanced funds for the first half of 2007 was 2.82% and first quartile performance for these funds showed a return of more than 3.56%. Performances for Canadian asset managers, which account for the main components of balanced funds, are presented in the table below.
Interest rates for Canadian bonds underwent similar movements to those for the same period last year; i.e. rates rose in the first half-year and the bond market became more volatile. A greater median added value would have been expected; however, the medium return was less than 0.06% in comparison with the benchmark. The finding is similar for a first quartile performance, with a low added value of 0.15% for the same period.
In comparison with the benchmark, large cap Canadian stocks had a median added value of 0.77% in the first half year. This performance can be explained by and large by an overweighting of BCE and Alcan in the portfolios of institutional mangers. We can also note the strong added value of the first quartile manager, beating returns posted by the S&P/TSX index by more than 1.6%.
After several quarters of relatively poor performance owing to strong returns in the Materials sector on Canadian small cap stocks, managers performed well, posting a median added value of 1.48% in the first half of 2007. This performance is explained in part by the underweighting of the Materials sector, an underweighting historically observed in managers’ performance. Also, the first quartile manager added more than 2.6% in comparison with Nesbitt Burns.
As regards foreign assets, the main indexes in local currencies have performed well since the beginning of the year, as shown in the table below. These performances were, however, mitigated by the strength gained by the canadian dollar in relation to the most important currencies (pound sterling, euro, yen, us dollar, etc.) in the second quarter of 2007.
The median returns for
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