First Category: The Bear Tamers Mutual Funds

These 2 funds were strong enough to show strong results for Canadian neutral balanced funds. In fact, they were showing a loss around -11% in 2008 while most Canadian balanced funds were around -16% to -25%.  Interesting enough, on a very short period of time (3 years), they show positive results even though the year 2007 didn’t show much growth on the stock market and the year 2008 was a complete catastrophe.

FUND NAME	MER (%)	ASSETS ($M)	3 YR QRT	3 YR RTRN	10 YR QRT	10 YR RTRN
BMO ASSET ALLOCATION	2.01	976	1	1.8	2	5.2
RBC MONTHLY INCOME	1.14%	6,684	1	1.3	1	8.3

Second Category: The Bear Busters Mutual Funds

In this category, we regroup the bonds and mortgage funds that always show good return during a bear market. While the stocks are plunging, the bonds and mortgage funds are known to offer some interesting yield.

FUND	MER (%)	ASSETS ($M)	3YR QRT	3 YR RTRN	10YR QRT	10 YR RTRN
ALTAMIRA INCOME	1.05	243	1	4.5	2	5.4
NATIONAL BANK MORTGAGE	1.67	1,234	2	3.9	1	4.9
NB SECURE DIVERSIFIED	1.46	79	1	4.6	n/a	4.2
RBC CDN SHORT TERM INCOME	1.19	2,519	2	4.2	2	4
SCOTIA MORTGAGE INCOME	1.2	300	2	4	2	4.2
TD MORTAGE	1.73	938	1	4.6	2	4.6
TD SHORT TERM BOND	1.05	2,254	1	5	1	4.9

Third Category: The Strong Mother Ship Mutual Funds

We call them strong as they were hit by a huge storm in 2008 (they lost between 42 to 48%) but they still show very high return over the past 10 years. Those Canadian Mutual funds are known to outperform and have a solid history. No matter how strong the bear market is, they will keep their head over the water.

FUND	MER (%)	ASSETS ($M)	3 YR QRT	3 YR RTRN	10 YR QRT	10 YR RTRN
BMO SPECIAL EQUITY	2.37	285	1	-1.7	2	9.2
ALTAMIRA QUEBEC GROWTH	2.35	14	1	2	2	9.3
SCOTIA RESOURCE	2.33	124	2	-2	2	13.2
TD CANADIAN EQUITY	2.07	2,787	2	-3.4	1	7.1

As you can see, there are several ways to chose mutual funds in order to go through a bear market. You can pick a fun that will do good regardless of where you stand in the economic cycle, you can also decide to hide from the stock markets and refuge your investments towards mortgage and bonds funds or you can accept to live the russian roller coaster life with strong mutual funds that always show big numbers (positive or negative) but have a strong return history.

Today, we show a global appreciation of each Canadian mutual funds family (provided by Canadian bank only). You will be able to see which mutual fund family has been showing the best return over one, three and five years.

Best Canadian Mutual Funds (Canadian big Banks only)

	BMO INVESTMENTS	CIBC SECURITIES	NATIONAL BANK MUTUAL FUNDS	RBC ASSET MANAGEMENT	SCOTIA SECURITIES	TD ASSET MANAGEMENT
Above Performance Performers	10 (14.7%)	26 (11%)	25 (18.9%)	26 (9.7%)	7 (5.9%)	66 (19.6%)
Below Average Performers	18	53	17	38	13	49
Inconsistent Performers	40	156	90	204	98	222
Total Funds	68	235	132	268	118	337

As you can see, there is a huge difference from one Canadian mutual fund family to another. Some banks have decided to reduce their mutual funds offer (such as the BMO, National Bank and Scotia Securities) while the 3 others (CIBI, RBC and TD) have multiplied their mutual fund family.

The percentage besides the number of the above average performers mutual funds for each family determines how many funds finish in best first and second quartile. At first glance, the TD fund might see very attractive when you see that they have 66 mutual funds among the best performing in Canada. On top of that, even when we consider their the date in percentage (19.7%) they are still the best performing Canadian mutual funds family among Canadian banks.

I agree that the past is not predicting the future but you must agree with me that some Canadian Banks definitely know better how to manage investors’ money. In the upcoming post, we will provide more details about different mutual fund asset class.