TORONTO, CANADA — (Marketwire) — 02/16/12 — Canadian World Fund Limited (TSX: CWF) had a net asset value per share (NAV) return for 2011 of -18.2%. By comparison, the return of the benchmark Morgan Stanley Capital International All Country World Index (MSCI ACWI) was -7.4%, expressed in Canadian dollar terms. For 2011, CWF-s market return was -14.0%. Net asset value at December 31, 2011 was $35,540,000, a decrease from $43,462,000 at the end of 2010. The corresponding NAVs at December 31, 2011 and December 31, 2010 were $4.94 and $6.04, respectively.
Entering 2011, many market observers expected a continuation of the long deleveraging process that began in 2008 and a steady improvement in the performance of the global economy. However, these expectations were cast aside as debt and credit issues intensified and recessionary conditions threatened, eclipsing the fact that globally it was actually a year of above-average corporate revenue and earnings growth. Financial performance and equity market performance became disconnected.
Consequently, CWF was affected negatively in the growing gloom that pervaded increasingly challenged markets. Most of the Company-s decline occurred in worsening stock performance through the second half of the year, with holdings being particularly hard hit during the volatility of September, November and December, when almost all of the negative return for the year was generated. Although generally near fully invested, a higher than usual cash balance, averaging in excess of 15%, was maintained in the portfolio during the fourth quarter limiting slightly the effects of negative market volatility.
Exposure in emerging markets, such as China, India and Brazil, was especially impacted by weakening global economic growth, tightening fiscal policies and declining currency values versus the U.S. dollar, as evidenced by the -18.6% return of the Morgan Stanley Emerging Markets Index, expressed in Canadian dollar terms.
CWF is a TSX-listed global equities fund that provides one of few opportunities for bottom-up investment in securities of publicly traded, primarily growth companies in a global portfolio.
Contacts:
Canadian World Fund Limited
Jonathan A. Morgan
President & CEO
(416) 366-2931
(416) 366-2729 (FAX)