Ted Whitehead

Small cap manager is sticking with resources despite "hiccup"

Diana Cawfield 2 January, 2009 | 2:00PM
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Ted Whitehead, manager of the $160-millionManulife Growth Opportunities, is awaiting a rebound in resources. "We've stuck with materials and energy," he says, "and believe if we do get a massive rally, this is where you're going to make some money."

A vice-president and senior portfolio manager at MFC Global Investment Management in Toronto, Whitehead employs a quantitative model. It ranks more than 700 stocks in the small to mid-capitalization universe, with the key criteria being earnings surprise and price momentum. When fundamental analysis is added to the research, about 50 companies end up in the top ranking.

Currently, the fund holds about 10% of its portfolio in large-capitalization companies, added as a place to hide. "We're swimming against the current," says Whitehead, "and valuations don't matter in this environment." To add to the challenge, the small-cap companies rely on financing to grow and they're not getting access to credit, he adds.

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About Author

Diana Cawfield

Diana Cawfield  Diana Cawfield is an award-winning writer who has been a regular Morningstar contributor since 2000. Her numerous publication credits include the Toronto StarAdvisor's Edge and Chatelaine, as well as the Canadian Securities Institute's online educational services.

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