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Discussion Starter #3 (Edited)
The Toronto Star today published lists of the 25 best and worst three-year performing funds in the Canadian Equity category.

So, what were the top two performing funds? They were the iShares DJ Canada Select Growth Index ETF (XCG) which had a 3 year return of an unimpressive -0.2% (you'd have done better in a savings account!!) and the Claymore CAN Fundamental Index ETF with a 3 year return of -0.3%.

Not one single, smart mutual fund manager was able to beat these returns although they charged a hefty fee to their clients for trying.

In fact, the worst performing 25 funds had total assets under management of 3342 $M and charged annual fees as high as 2.86% and an average of around 2.5 percent.

The iShares S&P/TSX Capped Composite Index and the iShares S&P/TSX Largecap 60 Index ETF's both had a 3 year return of -1.8%.

Why do smart people still insist on investing in managed funds?

Why do other smart investors continue to feel that they can beat the indexes over the long term and spend copious amounts of time and effort trying?

Just invest in the indexes long term and quit trying to outsmart the indexes and quit paying high fees to fund companies when they too can't and won't beat the indexes over the long term.

As noted, this week's most significant product launch was the debut of the Horizons BetaPro S&P/TSX Index ETF HXT)with it's miniscule management fee of 0.07% making it the cheapest fund in Canada!!! If you are simply investing in the index, you might as well do it the cheapest way possible.

Just take a minute and compare the long term fees of the HXT fund charging 0.07%, on any chunk of money you wish, to one charging an annual management fee of an average of 2.5% year after year after year, ad nauseum whether you are making any money or not, over a given period of time.

No Canadian Equity Fund, index or managed, made money over the past three years but the fund companies just kept on extracting their obscene fees from their clients. Nice work if you can get it but, then again, they have all of that overhead that they have to pay for and your advisor has to get his or her money from somewhere and why not from YOU?

Outsmart them all and simply invest in broad-based, low fee index funds and the new BetaPro product would be a good place to consider putting your money.

The lower the fee, the better!!!

We grow too soon olde and too late schmart!!

94 Posts
A very good article by Mr. Carrick. I think this competition is great for investor. But despite BMO DJCT 60 Index is cheaper, the pro still play with XIU. So one is skeptical about the success of HBP TSX60. HBP became big simply on their inverse or leverage etf. Essentially added value (if there any on those)
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