Fund Company: National Bank Mutual Funds
Fund Type: Natural Resources Equity
Rating: Pape: $$$; FundGrade “B”
Risk Level: High
Load Status: No load
RRSP/RRIF Suitability: Fair/Poor
TFSA Suitability: Good for aggressive investors
Fund Code: NBC844
Manager: Mark Jackson (Natcan Investment Management)
See the Fund Library Fund Card for more details
If you judge a fund only on the basis of the latest 12-month performance, you’ll give this one a pass. Sure, it gained 41% in the year to March 31, 2010, but that was way off the pace of the peer group, which averaged 59%. But if you take a longer-term view, this one looks more impressive. Returns over all time frames from two to 10 years are above average, by a significant amount. The 10-year average annual compound rate of return of 16.4% is two points better than the category norm. Over the past five years, this fund really shone, with an average annual gain of 13.4% compared with 8.9% for the peer group.
The fund focuses on mid- to large-cap resource stocks, so it is not surprising to see names like EnCana Corp., Teck Resources Ltd., and Canadian Natural Resources Ltd. in the top-10 holdings. But there are a number of smaller companies in that elite list, some of which, like Crew Energy Inc., may not be familiar to most investors.
Geographically, the fund invests almost exclusively in Canadian stocks (74% of the total as of March 31, 2010). Foreign stocks make up 14.8% of the mix, income trusts account for 6.4%, and the rest is in cash. Just under half the portfolio is allocated to the materials sector, while another 46% is in energy stocks.
This is one of the better no-load resource funds, and if you are a National Bank customer, it is certainly worth a look. It would be a good choice for an aggressively-managed TFSA.
Gordon Pape is one of Canada’s best-known personal finance commentators and mutual fund experts and a regular contributor to the Fund Library.
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Commissions, trailing commissions, management fees and expenses all may be associated with mutual 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.
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The foregoing is for general information purposes only and is the opinion of the writer. This information is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting or tax advice. However, please call the author to discuss your particular circumstances.