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During the quarter, there were no additions and one deletion to our Recommended List.
Notes:
Trimark Fund – Effective immediately, we are removing the UNDER REVIEW rating from the Trimark Fund. The management team has been running the fund since April 2011. Since that time, the risk reward profile of the fund has improved, and we have developed a level of comfort with the managers. Based on this, we feel it is appropriate to reinstate the fund back on to our Recommended List.
Sprott Canadian Equity Fund – During the quarter, we removed the Sprott Canadian Equity Fund from our list. There is little debate that the fund had had a tremendous run. In fact, prior to 2008, it seemed that it could do no wrong. While the fund had always been volatile, volatility has been on the upswing since the onset of the financial crisis. The fund has always been thematically managed. That has not changed. But the fund has now essentially morphed into a precious metals fund, with more than 80% invested in precious metals bullion or equities. Based on recent manager commentary, this positioning is expected to remain in place for some time. In reviewing the fund in light of this, it becomes increasingly difficult to justify having the fund on our Recommended List. It has struggled on a risk adjusted basis of late, and has lagged many other precious metals funds on a number of metrics. Considering the fund’s positioning, volatility profile, and cost, we believe that investors may be better off investing in a precious metals fund directly. We would suggest RBC Global Precious Metals, or the Sentry Precious Metals Growth as a couple of good options in the category.