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Analysis: The fund did very well for investors in its first full calendar year, gaining just under 40% in 1997. But it went into a tailspin from 1998 through to 2000 as Michael stood back from the high-tech bubble. Although the U.S. market was strong during that period, the value investing approach was definitely out of sync with what investors wanted, which was fast growth. As a result, this fund struggled to slightly better than break-even returns in 1998 and 1999 and then dropped 6.7% in 2000. Once the tech boom ended, however, everything changed, The fund scored gains of 39.5% in 2001 and 6.9% in 2002, at a time when the Dow, S&P 500, and Nasdaq were all tumbling. The profits continued rolling once the markets turned around with gains of 32.7% and 20.9% in 2003 and 2004 respectively. However, the rising loonie reduced returns to single digits in 2005 and 2006, and the fund took a big hit in 2007 as the Canadian dollar reached parity plus with U.S. currency. Over the year to Nov. 30/07 the fund experienced the worst 12-m
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Analysis: After honing his value investing technique in the Canadian markets, manager Irwin Michael, the driving force behind the ABC Funds, decided to take his act across the border in 1996 by launching this fund, the third in his stable. As with his other funds, stocks are selected based on exceptional value, using a well-developed set of screening techniques. The fund did very well for investors in its first full calendar year, gaining just under 40% in 1997. But it went into a tailspin from 1998 through to 2000 as Michael stood back from the high-tech bubble. Although the U.S. market was strong during that period, the value investing approach was definitely out of sync with what investors wanted, which was fast growth. As a result, this fund struggled to slightly better than break-even returns in 1998 and 1999 and then dropped 6.7% in 2000. Once the tech boom ended, however, everything changed, The fund scored gains of 39.5% in 2001 and 6.9% in 2002, at a time when the Dow, S&P 500, and Nasdaq were all tumbling. The profits continued rolling once the markets turned around with gains of 32.7% and 20.9% in 2003 and 2004 respectively. However, the rising loonie reduced returns to single digits in 2005 and 2006, and the fund took a big hit in 2007 as the Canadian dollar reached parity plus with U.S. currency. Over the year to Nov. 30/07 the fund experienced the worst 12-month loss in its history, dropping 21.6%. Despite this, The Fund Library ranks it as the second-best performer in its category (U.S. Small/Mid Cap) over the past decade. To Nov. 30/07, the ten-year average annual compound rate of return was 7.4%, compared to an average of 4.7% for the category. The portfolio is relatively small at around $80 million, due in large part to the $150,000 minimum. We are reducing the rating to $$ until we see evidence of a turnaround here.onth loss in its history, dropping 21.6%. Despite this, The Fund Library ranks it as the second-best performer in its category (U.S. Small/Mid Cap) over the past decade. To Nov. 30/07, the ten-year average annual compound rate of return was 7.4%, compared to an average of 4.7% for the category. The portfolio is relatively small at around $80 million, due in large part to the $150,000 minimum. We are reducing the rating to $$ until we see evidence of a turnaround here.