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What are we looking for?
How some of the winners of the 2011 Lipper Awards have performed in the last year.
The screen
We looked at the one-year return to Feb. 28 for funds that won 2011 Lipper Awards for best three-year returns. These accolades are bestowed by U.S. fund research firm Lipper Inc., a division of Thomson Reuters. Lipper says that the three-year period can take a fund through a complete market cycle.
What did we find?
Many of 2011's big winners continued to perform well after collecting their honours. Twenty-three of the 30 winners beat the S&P/TSX Total Return Index of 4.6 per cent for the year ended Feb. 28. But not all the results were stellar – some funds hit a wall, and three were in the red over the period.
The top performer was Investors Global Health Care, which returned more than 23 per cent in the year ended Feb. 28. Manager Richard Wong of I.G. Investment Management Ltd. attributes his success both to growth in the health sector and other market conditions.
"Because the economy is not growing that quickly, many investors are looking for dividends and steady growers, and health care fits that bill," said the fund manager, who is also a medical doctor. Dr. Wong thinks that these macro trends are unlikely to change in the next year, and the long-term outlook for health care is positive, given the health requirements of baby boomers and their expected prescription needs.
Some funds, such as Black Creek Global Leaders and Black Creek Global Balanced, went by different names when they picked up their 2011 awards; back then, they were Hartford Global Leaders and Hartford Global Balanced. The name change followed CI Investment Corp.'s acquisition of the funds' parent company Hartford Investments Canada Corp. last year.
The funds continue to be led by Richard Jenkins and Bill Kanko, who manage the products through their firm, Black Creek Investment Management Inc.
But not all that glitters can stay golden. Three of the Lipper Award winners posted negative annualized returns. Sentry Precious Metals Growth Fund performed the worst, down nearly 36 per cent for the year ended Feb. 28. The fund, which invests primarily in companies operating in the precious metals sector, identifies itself as high risk, with a long-term approach.
While the fund has struggled in recent months, it's worth noting that it is one of the top-performing of the precious-metals equity funds over the past five years.