| Fund Company | Dynamic Funds |
| Fund Type | Global Equity |
| Rating | D |
| Style | Growth |
| Risk Level | High |
| Load Status | Optional |
| RRSP/RRIF Suitability | Poor |
| TFSA Suitability | Poor |
| Manager | Noah Blackstein since January 2001 |
| MER | 1.42% |
| Code | DYN 014 – Front End Units DYN 714 – DSC Units |
| Minimum Investment | $500 |
Analysis: Despite posting a more than respectable gain of 7.2% in 2012, the Dynamic Power Global Growth Class lagged both the index and the peer group, finishing in the bottom quartile for the year. In fact, the fund has struggled since early 2011 and has been on a roller coaster ride since late 2007.
Through it all, manager Noah Blackstein has stayed true to his style, running a very concentrated portfolio of 20 to 30 companies that he believes to have the best growth prospects. He continues to look for those companies that have strong earnings momentum and a history of upside earnings surprises. Based on this approach, the portfolio is very heavily weighted in technology, consumer discretionary and healthcare stocks.
Unfortunately, these were not the sectors that drove the rally in 2012. Instead, it was those that are historically considered to be lower growth sectors, namely financials, drug companies and utilities that rewarded investors substantially last year. Looking ahead, Mr. Blackstein noted in a recent commentary that he believes that the stage is set for a rebound in the fund. Many of the high growth names are trading at valuations that are at multiyear lows compared with the index.
While have not been overly impressed with the fund’s recent performance, we are encouraged that they have remained committed to their style. Anytime you have a manager that has a distinct style, there will be periods of time where it underperforms. We believe the recent past has been one of those times for this fund and that those with the stomach to hang in there for the long term will be rewarded with above average gains.
As we have always stated with the Power funds, they are not for the faint of heart given their above average volatility. This fund is no exception. It should not be considered a core fund. Instead, it is only suited to those investors who can accept significant swings in the value of the fund, both to the upside and more importantly to the downside. But for those investors who can, this can be a good way to add a little bit of kick to their portfolio.