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Number Cruncher

Why buy and hold doesn't always work Add to ...

What are we looking for?



The biggest losers among investment funds over the past 15 years.



Note that many underperforming funds no longer exist. They have been wound down, or merged with others. The losing funds listed here represent the bottom tier of the survivors.



The screen



We looked for funds with the worst returns over the 15 years to Feb. 29. U.S. dollar, segregated and duplicate versions of funds have been excluded.

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What did we find?



Japanese stock funds have had a miserable time. A labour-sponsored investment fund has also been bleeding red ink.



Investors Japanese Equity lost an average of 6.3 per cent a year over 15 years, while BMO Japanese shed 4.3 per cent annually. The losses are not surprising given the long decline of the Japanese market since 1989 when the Nikkei 225 Index hit the 39,000-level. Today, the index is struggling to reach the 10,000-point range.



Closer to home, GrowthWorks Canadian has had a tumultuous existence, shedding nearly 4.9 per cent a year. Launched in 1990 as Working Ventures Canadian Fund, it was fined $10-million in the early days for sitting in treasury bills and failing to invest enough money in the venture-capital area to meet an Ontario-government deadline.



Vancouver-based GrowthWorks Capital Ltd. acquired the fund in 2002, as well as several peers later. The assets of Canadian Science and Technology Growth, Capital Alliance Ventures, ENSIS Growth and Canadian Medical Discoveries Fund were eventually rolled into GrowthWorks Canadian.



The fund, whose total assets are about $234-million, was closed to new investors last fall. Weekly redemptions were also suspended. The venture-capital manager wants to preserve cash for additional investments in promising companies in the GrowthWorks Canadian portfolio. The fund has had a tough time raising money because of Ontario's decision to reduce, and then phase out tax credits for venture-capital funds.



GrowthWorks Capital blames the see-saw stock markets for preventing the fund from selling or “exiting” its investments. “The recent heightened level of concern about a new recession, and resulting high levels of market volatility have dampened activity in initial public offerings and M&A (merger & activity) markets,” its president David Levi has said.

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