The Canadian dollar touched US$1.10 for a brief moment, its highest level to date. But with commodity prices and the U.S. economy slowing, the loonie may have peaked for the time being.

This is good news for inves-tors in global equity funds, who have watched a rising C$ wipe out most of their gains in recent years. Eventually, someone will remember that currency movements are seldom permanent.

On that note, one fund worth studying is the $5.2-billion Trimark Select Growth Fund, an AIM Funds Management Inc. offering that earns a three-star risk-adjusted ranking from Morningstar Canada despite fourth-quartile returns over the past five years.

The fund rose 5.3% in calendar 2004, when the benchmark index — the MSCI world index— was up 6.9%. That trend continued; it delivered a modest gain of 2.6% in 2005, while the index saw an increase of 7.3%. In 2006, however, the fund was up 23.7%, this time besting the index return of 20.2%. Year to date, however, it has lost 16.9% — all of which translates into an average annual compound return of 4.7% for the five years ended Oct. 31.

Compare these results with another three-star fund, CI Invest-ments Inc. ’s $1.7-billion CI Global Fund. The fund rose 5.2% in calendar 2004, posting a 7.3% gain in 2005, before returning 16.5% last year. So far in 2007, it has lost 13.5%. As a result, its five-year average annual compound return is 7.9% — a second-quartile showing.

Richard Jenkins, manager of the Trimark fund, began his investment career in 1991. He spent two years with TD Asset Management Inc. before joining AIM. He was involved with this Trimark fund off and on until being appointed lead manager three years ago.

The Trimark style has been to focus on blended, bottom-up stock-picking. In Jenkins’ screening process, he looks at large businesses that are leaders in market share and impact that can respond effectively to competitive threats. Average portfolio turnover has been around 30%. No currency hedging strategy is in place.

After a stint as chief strategist at Merrill Lynch & Co. Inc., CI fund manager Bill Sterling has been at the helm of CI Global for the past 17 years — first at BEA Associates, an investment-counselling firm that later became part of Credit Suisse Asset Management Securities Inc., and then through Trilogy Advisors LLC, which he founded in 1999.

Sterling employs a top-down style driven by emerging global trends. He develops scenarios for the economy, interest rates and earnings; assigns probabilities to each; and structures portfolios with an emphasis on growth.

He hedges foreign currency exposure from time to time, and portfolio turnover ranges from 60% to 100% a year.

With different takes on country exposure and few common holdings, the two funds are quite different. But neither keeps much money on the sidelines: Trimark’s cash holdings are negligible; the CI fund has about 5% of its assets in cash.

The Trimark fund has a concentrated portfolio of about 30 stocks. Jenkins generally plants as much as half its assets in the top 10 holdings, with these now accounting for about 47% of the fund.

Sterling’s approach in the CI fund is much different. With 120 holdings, its top stocks account for only 19% of its assets.

The Trimark fund has no Cana-dian equities and, at 26%, is underweighted in U.S. stocks relative to the index’s 43%, which is significantly less than the fund’s historical preference for cross-border companies. British equities account for a further 22% of the fund; the rest of Europe, 25%; Mexico, 7%; and Japan accounts for another 4%.

The Trimark fund has no exposure to energy, telecoms or utilities. Instead, Jenkins leans toward consumer discretionary, in which he is heavily overweighted. And he has been increasing exposure to almost all the fund’s financial services holdings — notably, U.S. Bancorp. Major holdings include Cemex SAB de CV, a major cement producer in Mexico, and Vienna-based Wienerberger AG, the world’s largest manufacturer of clay bricks. Both have been affected by the slowdown in U.S. housing demand, but Jenkins believes their international operations will compensate for this.

The CI fund also invests outside Canada, but with a different geographical breakdown. Its 45.5% weighting in U.S.-based companies approximates the benchmark. Thirteen per cent of the CI fund is invested in Japan, another 4% in Hong Kong, and 20% is spread among mature European countries, including Germany (7%)and France (4%).

@page_break@Over the past two years, the CI fund’s holdings in Japanese equities have been trimmed while U.S. large-cap names have been added. Playing down energy and avoiding U.S. retailers, the fund has large bets on health care, financials and IT. Major holdings include Microsoft Corp. and Hong Kong-based Hutchison Whampoa Ltd., the world’s leading seaport inves-tor.

The risk level assessed on the two funds is similar, with the Trimark fund registering a 12.2 standard deviation over the past five years and the CI fund coming in at 11.6. Both levels are higher than for the index and the median fund. The CI fund’s 9.1 rating over three years means it has been the lower-risk option of the two funds recently.

The funds’ relative five-year Sharpe ratios of 0.19 for Trimark and 0.45 for CI indicate the CI fund has been the better risk-adjusted performer, in line with both the benchmark and the median fund. But, like most of its peers, it hasn’t made a lot of money.

If you go back far enough, the Tri-mark fund has outperformed the index and its peers. Its 5.7% 10-year return puts it in the top quartile of global funds. The CI fund earned 3.9% in this period.

Both funds have an MER of 2.35%, which is lower than 80% of funds in the global equity category. IE