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High-performance Dynamic Power Global Growth Class a fund for trading
3/20/2019 5:43:31 PM
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By Dave Paterson  | Wednesday, August 01, 2018


Dynamic Power Global Growth Class should come with a warning label telling those who suffer from heart conditions that they may want to avoid it. However, for those looking for a way to add a little excitement to their investment portfolio, this global offering from the Dynamic fund factory may be just the ticket.

Managed by Noah Blackstein, Vice-President and Portfolio Manager at 1832 Asset Management LP, the fund holds a very active, concentrated portfolio of between 20 and 30 companies from around the world that he believes to have the best growth prospects, strong earnings momentum, and a history of upside earnings surprises.

Over his 20-year tenure with Dynamic, Mr. Blackstein has built a reputation as one of the premier U.S. and global growth fund managers. Over the long-term, he has indeed been very successful with his strategy for this fund.

As of June 30, the fund had posted a 5-year average annual compounded rate of return of 20.3%, nearly doubling the 10.6% rise in the MSCI World Index. Recent numbers have also been strong, with the fund gaining more than 27% in the 12 months ending June 30.

However, running such a concentrated, growth-focused portfolio means a significant level of volatility over the year. Average 3-year standard deviation at June 30 was 17.8%, giving it a Fundata Volatility Ranking of 10/10. When the fund wins, it wins big, but when it loses, it tends to lose big. In the past five years, portfolio volatility has been nearly double the broader market. Further, if we look at the market crash of 2008, the fund lost more than 47%, while the index was down 25% in Canadian dollar terms.

The fund’s portfolio is concentrated not only in number of holdings, but also in sectors. At the end of June, it held 23 names, and nearly two-thirds were invested in information technology, with the balance in the healthcare and consumer discretionary sectors.

Top holdings at the end of June included Baozun Inc. (NASDAQ: BZUN), Samsung Biologics Co. Ltd. (KS: 207940), Weibo Corp. (NASDAQ: WB), ServiceNow Inc. (NYSE: NOW), and Vertex Pharmaceuticals Inc. (NASDAQ: VRTX).

The portfolio turnover is high as Mr. Blackstein boldly goes where the growth is. In the past five years, turnover has averaged nearly 200%.

Over the long-term, however, this fund has the potential to outpace its peers. But be warned: The ride will be very bumpy. If you have the stomach to stick with this high-conviction offering, you have the potential for outsized returns over time. This is more a fund you’ll want to trade rather than buy and hold, taking profits after a big run to protect your capital.

Dynamic Power Global Growth Class
Fund company:
Dynamic Funds
Fund type:
Global Equity
FundGrade Rating: B (June)
Style: Large Cap Growth
Risk level: High
Load status: Optional
RRSP/RRIF suitability: Fair
Manager: Noah Blackstein since January 2001
MER: 2.49%
Fund code: DYN014 (Front-end load)
Minimum investment: $500

Dave Paterson, CFA, is the Director of Research, Investment Funds for D.A. Paterson & Associates Inc., a consulting firm specializing in providing research and due diligence on a variety of investment products. He is also the publisher of Dave Paterson’s Top Funds Report, offering regular commentary and in-depth analysis of Canada’s top investment funds. He uses a unique analytical approach to identify funds with strong, risk-adjusted returns, and regularly publishes his insights and analyses in Fund Library.

Notes and Disclaimer

© 2018 by Fund Library. All rights reserved. Reproduction in whole or in part by any means without prior written permission is prohibited.

Commissions, trailing commissions, management fees and expenses all may be associated with fund investments. Please read the simplified prospectus before investing. Mutual funds are not guaranteed and are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer. There can be no assurances that the fund will be able to maintain its net asset value per security at a constant amount or that the full amount of your investment in the fund will be returned to you. Fund values change frequently and past performance may not be repeated. No guarantee of performance is made or implied. This article is for information purposes only and is not intended as personalized investment advice.


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