Mutual funds in the resource and precious metals sectors were among the top performing in 2010.
In a column by Brian Bridger, manager of analytics and data operations at Fundata Canada, 22 of the top 25 mutual finds last year were in the resource and mining sectors.
Precious metal equity funds led the pack with an average return of 55%. Middlefield Precious Metals Class was the top fund of the year with an 89% one-year return. Bridger noted the fund’s investments were fairly concentrated. At one point in the year it held only 12 securities excluding cash.
Other notable funds in the category included Sentry Mining Opportunities Fund, which had an 89% one-year return, and Sentry Precious Metals Growth Fund, which earned 78%.
Natural resource equity funds averaged a 28% one-year return with DMP Resource Class posting a 64% return last year. The fund primarily invested in energy, base and precious metals.
Other top performers included CIBC Canadian Resources Fund, which returned 55% and Renaissance Global Resource Fund, which reported a 50% one-year return.
Overall, the markets were robust last year, even if they did not provide the spectacular returns that were achieved in 2009. With only one exception, all fund categories posted positive one-year returns with 42 categories outperforming their 10-year average return. Eighteen fund categories produced double-digit returns.
Bridger noted that the analysis did not take into account other important mutual fund characteristics like fees and the fund manager’s tenure, and only included funds that were open to new investors, disclosed fund holdings regularly and were sold by simplified prospectus with a minimum initial investment of less than $5,000.