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Shopping for mutual funds can be a pretty daunting task considering the enormous selection--there are more than 1,100 mutual funds in Canada's financial supermarket. So where do you start? Well, do what the experts do: insist on funds with track records of at least three to five years, 10 if you really want to cut back your options. There are only a couple of hundred of these to contend with. To make your task a little easier, FPM, with the help of Nesbitt Burns Inc.'s Stephen Kangas, has compiled this top 10 list of 10-year mutual funds.
Our picks are geared to long-term growth investors, so we've leaned toward an equity (stocks) bias since most studies prove that over the long run stocks outperform bonds or cash. For investors with a long-term horizon and moderate capacity for risk, these funds could be core funds in an RRSP or could be used to add an extra element of growth in the 20% foreign content portion of an RRSP.
There are three Canadian equity picks, three global equity picks, two U.S. equity funds, one balanced fund and one bond fund. One problem with choosing any long-track-record fund is that the managers responsible for generating those performances may not still be on board. There are several examples in our list, so keep this in mind when deciding where you want to place your hard-earned money.
C.I. Pacific's average compound annual growth rate (CAGR) is a stellar 19% for the 10 years ending June 30, 1995, which puts it at the top of all 10-year lists, not just the international equity category. One of the oldest funds from C. I. Mutual Funds, C.I. Pacific limits itself to one geographic region, which means the volatility factor is high. It's the one region most pundits predict will have the most economic growth in the foreseeable future, and is a play on the so-called Tiger economies of Singapore, Malaysia, Thailand and India, as well as established giants such as Japan and Hong Kong.
Any given year, C.I. Pacific resembles a roller-coaster. It lost 12% in 1994 but returned a...