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Analysis: AGF needs to update its website description of this fund. The positioning statement describes it as: “A growth Canadian equity fund identifying micro- to mid-cap companies poised for success.” Oh, really? Now check out the Top 10 holdings. Hmmm. We see names such as Petro-Canada, Teck Cominco, Canadian Oil Sands Trust, and Cameco. By what stretch of the imagination do these qualify as “micro- to mid-cap companies”? The fund is officially classified as Canadian Equity which makes a lot more sense in the context of the portfolio. In fact, this fund has been mislabeled for years, which may be why it only has about $1 billion in assets despite a good track record. So let’s be clear. If you buy units in this fund, you’re investing in a resource-heavy portfolio which, while it holds some small-cap stocks, is anchored by big players. Veteran manager Bob Farquharson, who has been running this fund for over 40 years, now has some help from newcomer Charles Oliver, who presumably is being groomed to take over. They use a bottom-up growth strategy and target those areas of the economy expected to outperform the market as a whole. The fund’s performance has been strong recently with a one-year gain of 22% (to June 30/07) and first-quartile finishes in both 2005 and 2006. Over longer time periods out to 20 years, results are consistently better than average. The main knock on this fund is a relatively high volatility score, due to the resource emphasis. That’s why we rate it $$$ rather than giving it the top $$$$ rating that the raw performance numbers suggest might be appropriate.