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Analysis: When it comes to consistency among resource funds, this one is hard to beat. It has been a first or second quartile performer every year but one since 2003 and has an outstanding five-year average annual compound rate of return of 15.2% (to Feb. 28), more than double the category average. That’s the second-best performance in the category over that time frame according to Fund Library rankings.
The fund is making a smooth managerial transition from veteran Bob Farquharson to rising star Robert Lyon and appears to be clicking on all cylinders. Although this is purportedly a global fund, about 60% of the assets are invested in Canada with 13.4% in the U.S. There’s a 7% stake in the U.K., 4.7% in Australia, and a smattering of holdings in such countries as Mali, Brazil, and Papua New Guinea. The largest single holding is Canadian Natural Resources and the fund also maintains a sizeable position in Brazilian oil company Petroleo Bras Sa Petro (NYSE: PBR) which represents 2.8% of total assets.
Of special interest is the fact that the fund has an above-average safety rating for its category despite a 36% loss for the 12 months to Feb. 28/09. That was bad but most resource funds did even worse during that time frame. If you prefer a resource fund with some international exposure this is a good choice although it is really more a North American fund than a global one. Because of the potential for high volatility, it is not recommended for RRSPs.