Comments on: A Mutual Fund Investor http://www.canadiancapitalist.com/a-mutual-fund-investor/ Helping you invest and prosper Sat, 11 Feb 2012 19:27:54 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Tom http://www.canadiancapitalist.com/a-mutual-fund-investor/#comment-12421 Tom Sat, 18 Nov 2006 19:53:43 +0000 http://www.canadiancapitalist.com/2006/11/17/a-mutual-fund-investor#comment-12421 Hi! Very great post! Bye, Tom <a href="http://www.structuredsettlementforum.com" rel="nofollow">Structured </a><a href="http://www.structuredsettlementforum.com" rel="nofollow">Settlement </a><a href="http://www.structuredsettlementforum.com" rel="nofollow">Forum</a> Hi!

Very great post!

Bye,
Tom
Structured Settlement Forum

]]> By: Phil S http://www.canadiancapitalist.com/a-mutual-fund-investor/#comment-12383 Phil S Sat, 18 Nov 2006 01:12:56 +0000 http://www.canadiancapitalist.com/2006/11/17/a-mutual-fund-investor#comment-12383 Generally speaking, mutual funds are perfectly suited for investors who are just getting started in investing, as they likely have a small portfolio and probably don't really know what they're doing. With a small portfolio, it's a good way of getting instant diversification and history has shown that they generally outperform returns from GICs. Speaking in specifics, bond funds don't make much of any sense at any time. The lack of a maturity date for the fund means that you're not guaranteed to get your original principle back. The possible exception is foreign bond funds, which are almost pure plays against the loonie, as equity risk has been stripped out of them (when compared to a foreign equity fund). But you have to look at them that way, not as a safe haven where your money is guaranteed to grow. One I've watched for a long time but haven't yet bought is the Friedberg Foreign Bond Fund. I personally continue to buy the Labour Sponsored Investment Funds, until McGuinty's Government finally kills it for good. If you think of them as essentially being private equity funds where you get a tax credit for investing in them, then it makes a lot of sense. Unfortunately, most of them have proven to be horribly managed (negative returns) with super high management fees, so YOU MUST CHOOSE CAREFULLY!!! There is also an entire world of exchange traded funds and index funds. So, to generalize and say that they're all bad is painting them all with one broad brush. I just recently bought an exchange traded fund containing nothing but REITs and Preferred Shares, which are some of my favourite investments. There are also income trusts which are structured like exchange traded funds and I've noticed that they didn't drop nearly as much as, say, the business trusts in the recent tax ruling. I suspect that it because most people believe (just as I do) that these income trusts can be easily converted to an ETF four years down the road. One I own is FC.UN (a mortgage fund) and one that I've had on my watch list for a very long time is CNV.UN (a convertible bond fund). Generally speaking, mutual funds are perfectly suited for investors who are just getting started in investing, as they likely have a small portfolio and probably don’t really know what they’re doing. With a small portfolio, it’s a good way of getting instant diversification and history has shown that they generally outperform returns from GICs.
Speaking in specifics, bond funds don’t make much of any sense at any time. The lack of a maturity date for the fund means that you’re not guaranteed to get your original principle back. The possible exception is foreign bond funds, which are almost pure plays against the loonie, as equity risk has been stripped out of them (when compared to a foreign equity fund). But you have to look at them that way, not as a safe haven where your money is guaranteed to grow. One I’ve watched for a long time but haven’t yet bought is the Friedberg Foreign Bond Fund.
I personally continue to buy the Labour Sponsored Investment Funds, until McGuinty’s Government finally kills it for good. If you think of them as essentially being private equity funds where you get a tax credit for investing in them, then it makes a lot of sense. Unfortunately, most of them have proven to be horribly managed (negative returns) with super high management fees, so YOU MUST CHOOSE CAREFULLY!!!
There is also an entire world of exchange traded funds and index funds. So, to generalize and say that they’re all bad is painting them all with one broad brush. I just recently bought an exchange traded fund containing nothing but REITs and Preferred Shares, which are some of my favourite investments.
There are also income trusts which are structured like exchange traded funds and I’ve noticed that they didn’t drop nearly as much as, say, the business trusts in the recent tax ruling. I suspect that it because most people believe (just as I do) that these income trusts can be easily converted to an ETF four years down the road. One I own is FC.UN (a mortgage fund) and one that I’ve had on my watch list for a very long time is CNV.UN (a convertible bond fund).

]]> By: Canadian Capitalist http://www.canadiancapitalist.com/a-mutual-fund-investor/#comment-12361 Canadian Capitalist Fri, 17 Nov 2006 18:27:21 +0000 http://www.canadiancapitalist.com/2006/11/17/a-mutual-fund-investor#comment-12361 I should probably have mentioned that the MER for the fund is under 1%. I should probably have mentioned that the MER for the fund is under 1%.

]]> By: Canadian Capitalist http://www.canadiancapitalist.com/a-mutual-fund-investor/#comment-12356 Canadian Capitalist Fri, 17 Nov 2006 17:32:29 +0000 http://www.canadiancapitalist.com/2006/11/17/a-mutual-fund-investor#comment-12356 I picked Leith Wheeler because they are meaningfully different from the index. They are underweight energy and gold, which I think takes guts to do. Their turnover has ranged from 18-30% which is really good as far as mutual funds are concerned. For most mutual funds, I would agree with you and I hope Leith Wheeler doesn't drift from its style. If it does, I will be selling! I picked Leith Wheeler because they are meaningfully different from the index. They are underweight energy and gold, which I think takes guts to do. Their turnover has ranged from 18-30% which is really good as far as mutual funds are concerned.

For most mutual funds, I would agree with you and I hope Leith Wheeler doesn’t drift from its style. If it does, I will be selling!

]]> By: GettingRichTogether.blogspot.com http://www.canadiancapitalist.com/a-mutual-fund-investor/#comment-12350 GettingRichTogether.blogspot.com Fri, 17 Nov 2006 15:27:08 +0000 http://www.canadiancapitalist.com/2006/11/17/a-mutual-fund-investor#comment-12350 I think mutual funds holding Canadian equities are one of the biggest scams out there. Look at most funds and their holdings are extremely similar. One may have a little more RBC, another a little more CIBC etc. They all have huge holding in the banks, and more recently our major Oil/Gas companies. When you look at how this differs from the index itself, it very rarely warrants the addtional MER you pay for with the managed fund. In your situation it does seem to make sense as the MER is so close to the index. My work plan offers very few options and the index itself is the only logical option for equities. Who manages your plan? I think mutual funds holding Canadian equities are one of the biggest scams out there. Look at most funds and their holdings are extremely similar. One may have a little more RBC, another a little more CIBC etc. They all have huge holding in the banks, and more recently our major Oil/Gas companies. When you look at how this differs from the index itself, it very rarely warrants the addtional MER you pay for with the managed fund.

In your situation it does seem to make sense as the MER is so close to the index. My work plan offers very few options and the index itself is the only logical option for equities. Who manages your plan?

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