What are we looking for?
Star mutual funds in 2010.
The screen
We screened for the 15 biggest gainers in all categories except for alternative strategies and retail venture capital. U.S. dollar, pooled, segregated and duplicate versions of funds were also excluded.
What did we find?
Glittering returns from precious metals and resource funds.
It is not surprising that these funds garnered outsized returns given soaring prices for gold, silver and copper. Middlefield Precious Metals Class, which surged 89.3 per cent, and Sentry Mining Opportunity Class, which jumped 88.8 per cent, rose to the top of the heap.
Gold explorers Canaco Resources Inc. and Rubicon Minerals Corp., as well as Rockgate Capital Corp., a silver-uranium play, were among the big movers for Middlefield. "I'm trying to find companies that are not anchored to the commodity price," said manager Dennis da Silva of Middlefield Capital Corp. He looks for companies with potential catalysts, ranging from takeovers to joint-venture possibilities with a senior producer.
While gold rose to just over $1,400 (U.S.) an ounce last year – shy of his $1,500 prediction – he suggested the yellow metal could yet reach $1,500 this year.
Redwood Global Small Cap, which climbed 74.1 per cent, and First Trust Raymond James Canadian Focus Picks, up 59.4 per cent, benefited from being heavily invested in resource stocks.
Michael Decter, manager of Redwood Global Small Cap, earns a performance fee for outpacing his benchmark. He is keeping his powder dry and has 40 per cent of his fund in cash for new stock issues and bargain hunting. The rest of the fund is in energy, gold and other metals stocks.
"We really think that the demand for resources by China, which has kept oil and copper prices high, and even Chinese demand for gold, is a continuing phenomenon," said Mr. Decter, president and CEO of investment firm LDIC Inc.
"We have been nimble, and have benefited from a rising tide of takeovers," such as the proposed acquisition of CIC Energy Corp. by JSW Energy Ltd., he said. Rodinia Oil Corp., Lysander Minerals Corp., 3P International Energy Corp. and Rockgate Capital have also been winners for him.