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Usually, just buy ETF's but have a buddy that keeps talking about his success in a mutual funds SUN105 and DYN004 and how ETF's are useless :)



Are their any ETF's that emulate these funds? Are these that good? With scotia, itrade.

Thanks guys!!
 

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Check the MER 's on those mutual funds. Depending on the amount of money invested and the length of time held it will cost a small fortune in fees over the life time of the investment.
 

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High MERs are worth it if the returns after fees beat low fee equivalent products... It seems to be the case here at least for the first fund (didn't check the second). I don't have S&P500 CAD numbers since the fund's inception (1998), but my rough calculations starting 2004 shows it beat the S&P by ~4% yearly returns after fees. This is the real deal as far as actively managed funds go, it's not an index hugger like the big banks are serving us.

Still, I wouldn't touch this with a 10-foot pole because I'm way too indoctrinated to passive indexing ;)
 

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It's the hot dice fallacy. In total, hedge funds and mutual funds fail to beat the averages but there are always a few kids with hot dice who beat the odds. Maybe 10% of them. If you catch the right fund at the right time you are golden but the odds are against you. I believe it's easier to beat the odds picking stocks yourself than depending on a hired manager but even then, very few can do it.

There are a handful of managers who beat the market consistently for 20 years or more, legendary names like Sir John Templeton, Peter Lynch, Warren Buffet. The trick is to identify them when they first start out . It doesn't help much to get on the gravy train the year before they retire,
 

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Glanced at SUN105.
Its 5-year return is 15.8%. Four of its top five holdings are Microsoft, Amazon, Adobe and Alphabet. Together, those names represent 24% of the fund.
Those names are also prominent in QQQ. That ETF's 5-year return is 16.3%.
So there's your comparable ETF.
QQQ's management fee is 200 basis points lower.

BTW, recommend reading Taleb's "Fooled by Randomness." It explains exactly how impressed one should be by a mutual fund manager's outperformance. (Spoiler: You shouldn't be impressed. It's almost certainly a random outcome.)
 

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Not much of a mystery here. These are tech-heavy funds. Tech happens to be doing well. Similar to QQQ.

That doesn't mean tech will be the best performer going forward. Choose the "right" sector which happens to do great, and yes, you'll do well. The problem is that you can't predict which sector will perform best from today forward. And the one which performed best in the past is not necessarily the best performer going forward.

The correct course of action is invest with a diversified portfolio and not try competing with your friend. That means a mix of broad market index ETFs that cover both US and Canada, such as: XIC, ZSP or XAW

You will underperform your friend as long as the current trends continue. You're going to have to get comfortable with that.

If you can't get comfortable with that, then you're doomed to the same fate as the people who previously got walloped by tech stocks (2001), energy & emerging markets (2008), gold miners (2013), etc.

In my 20 years of investing, I have never seen sector-focused investing work out well for anyone I know. When I first began investing, I knew many people who loved QQQ. That was right around the 2000 top. You might want to look at some historical charts to see what happened shortly after that.
 

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I have seen too many high performing funds that go on to years of really bad performance, that I would never put a lot of money into mutual funds. Templeton Growth, Industrial Growth, Altamira Equity, Sprott Equity, Front Street Growth, Dynamic Precious Metals.

Does your friend know what his funds hold and how risky they might be? Why do you care about his ignorant blather?

Give your friend a copy of William Sharpe's The Arithmetic of Active Management, and the latest SPIVA Canada report.
 

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There are few exceptions I make to Mutual funds TDB652 AND TDB976 ,The mer is almost 3% but they have been in my daughter's resp since 2008 and I probably bought them 20 years ago ,I have never bought a ETF in my life.Everyone has their own preferences but it does not mean one is better than the other...
 

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There are a handful of managers who beat the market consistently for 20 years or more, legendary names like Sir John Templeton, Peter Lynch, Warren Buffet. The trick is to identify them when they first start out . It doesn't help much to get on the gravy train the year before they retire,
It not always what you know it is also who you know. Buffet knows how/who to buy stocks before the government bails a stock out
 

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He does now but he didn't have that pull in 1951 when he started. For the first 20 years of his professional investment career he was practically unknown, working from the spare room in his house in Omaha Nebraska, beating all the hot shot fund managers in New York.
 

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It's the hot dice fallacy. In total, hedge funds and mutual funds fail to beat the averages but there are always a few kids with hot dice who beat the odds. Maybe 10% of them. If you catch the right fund at the right time you are golden but the odds are against you. I believe it's easier to beat the odds picking stocks yourself than depending on a hired manager but even then, very few can do it.

There are a handful of managers who beat the market consistently for 20 years or more, legendary names like Sir John Templeton, Peter Lynch, Warren Buffet. The trick is to identify them when they first start out . It doesn't help much to get on the gravy train the year before they retire,
I think Berkshire will continue their slight outperformance of the market.
Man people think it's the Warren Buffet show, some consider Charlie Munger.
They ignore the many other senior managers who do most of the work these days.

The reality is it's actually a very well run company with many strong executives and several profitable subcompanies, and a huge cash pile that they use opportunistically to great effect.

There are a lot of advantages to being a wholey owned subsidiary of BRK.

I think there is a lot of fear that Warren will die and BRK will collapse, I think those fears are unwarranted.
 

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Over long periods of time (years or decades), a simple index fund or ETF will beat high-MER mutual funds almost every time. Studies show this.
 

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ETF7506 You should make a bet with your friend that your friend will lose money with the mutual funds regardless if the mutual funds go up or down.

Reason being I remember reading that the best performing mutual fund for the year the average investor lost money by buying high & selling low.
 

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ETF7506 You should make a bet with your friend that your friend will lose money with the mutual funds regardless if the mutual funds go up or down.

Reason being I remember reading that the best performing mutual fund for the year the average investor lost money by buying high & selling low.
Very true. It's not enough to just have a good investment; you have to stick with it. Any many people have trouble doing this!
 
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