Skip to main content

Stefan Schurr/Getty Images/iStockphoto

Editor's note: Leith Wheeler Canadian Equity gained 13.6 per cent in 2012 and an annualized 7.1 per cent for three years. It was the fifth-best performing Canadian equity fund last year. Incorrect information appeared in an earlier version of this column. The correct table is attached to the bottom of this article and the text has been corrected.

What are we looking for?

Index beaters among Canadian equity funds in 2012.

Story continues below advertisement

The screen

We ranked the top 15 performers in this category to find funds that raced ahead of the S&P/TSX Total Return Index. U.S. dollar, segregated and duplicate versions of funds were excluded.

What did we find?

The leaders outpaced the benchmark's 7.2-per-cent gain by a wide margin.

Among the best performers was value-oriented fund Leith Wheeler Canadian Equity, which is run by a five-person team.

It gained 13.6 per cent last year, and also beat the index over three, five and 10 years. Helped by a lower fee than many peers, it was among more than 40 per cent of funds whose returns pulled ahead of the resource and financial-heavy benchmark last year. The index beaters also included exchange-traded funds such as BMO Low Volatility Canadian Equity ETF, up 13.9 per cent.

For the Leith Wheeler fund, 2012 was "a bit of an unusual year because we were beneficiaries of three premium takeouts of our companies," said Michael Schaab, a portfolio manager at Leith Wheeler Investment Counsel Ltd. Progress Energy Resources Corp. was bought by Malaysian state-owned Petronas; Miranda Technologies Inc. was purchased by Belden Inc., and Astral Media Inc. is in the throes of a takeover by BCE Inc.

Story continues below advertisement

The fund was also helped by being significantly underweight the struggling materials sector in 2012. Instead, it owns other names like Canadian National Railway Co., which gives indirect exposure to materials, but also to other parts of the Canadian economy.

Without the takeovers, the Leith Wheeler fund's return would have been closer to 11 per cent. Other return contributors included WestJet Airlines Ltd. and also Gilden Activewear Inc., where "the easy money has been made" as the apparel maker benefited from lower cotton prices, Mr. Schaab noted. "We also didn't own Research In Motion, SNC-Lavalin or some of the hiccups of last year."

Mr. Schaab, meanwhile, expects global growth to be "tepid" this year at around 2 per cent amid concerns over everything from China's slowdown to Europe's debt woes. "The problems of the world don't always impact every business that you want to own," he said. "Over the next three years, I wouldn't be surprised if we had high single-digit returns [annualized] in the equity market."

Report an error Editorial code of conduct
Tickers mentioned in this story
Unchecking box will stop auto data updates
Comments

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

If your comment doesn't appear immediately it has been sent to a member of our moderation team for review

Read our community guidelines here

Discussion loading ...

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.