Comments on: Bear Market Outperformance, eh? http://www.canadiancapitalist.com/bear-market-outperformance-eh/ Helping you invest and prosper Fri, 19 Mar 2010 21:48:54 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Ed Rempel http://www.canadiancapitalist.com/bear-market-outperformance-eh/#comment-181722 Ed Rempel Sat, 07 Feb 2009 00:58:33 +0000 http://www.canadiancapitalist.com/?p=1719#comment-181722 Hi DG, I agree with you that none of the stats really tell the story. The stats that show mutual funds make less than the index include all the index funds. "Active managers" in all the stats include all index funds! Of course, 100% of index funds don't beat the index. Many mutual funds, especially many bank and insurance funds, are closet indexers and just try to stay close to the index. These funds almost always make less than the index, as well. They usually don't even try to beat the index. These fund managers are just salaried employees trying to keep his job by having a portfolio similar to the index. It would be interesting to see stats comparing the index to active managers, and exclude index funds and closet indexers. Ed Hi DG,

I agree with you that none of the stats really tell the story. The stats that show mutual funds make less than the index include all the index funds. “Active managers” in all the stats include all index funds! Of course, 100% of index funds don’t beat the index.

Many mutual funds, especially many bank and insurance funds, are closet indexers and just try to stay close to the index. These funds almost always make less than the index, as well. They usually don’t even try to beat the index. These fund managers are just salaried employees trying to keep his job by having a portfolio similar to the index.

It would be interesting to see stats comparing the index to active managers, and exclude index funds and closet indexers.

Ed

]]> By: Book Winner and Weekend Links - Feb 6, 2009 | Million Dollar Journey http://www.canadiancapitalist.com/bear-market-outperformance-eh/#comment-181686 Book Winner and Weekend Links - Feb 6, 2009 | Million Dollar Journey Fri, 06 Feb 2009 11:31:00 +0000 http://www.canadiancapitalist.com/?p=1719#comment-181686 [...] Capitalist talks about bear market outperformance of active mutual funds.  I think it’s safe to say that he’s not a big fan of active [...] [...] Capitalist talks about bear market outperformance of active mutual funds.  I think it’s safe to say that he’s not a big fan of active [...]

]]> By: Silicon Prairie http://www.canadiancapitalist.com/bear-market-outperformance-eh/#comment-181661 Silicon Prairie Fri, 06 Feb 2009 04:09:42 +0000 http://www.canadiancapitalist.com/?p=1719#comment-181661 The best part is that in the first quarter it will probably be the other 47% that do better while everyone chases the "top quality" funds :) The best part is that in the first quarter it will probably be the other 47% that do better while everyone chases the “top quality” funds :)

]]> By: Doug http://www.canadiancapitalist.com/bear-market-outperformance-eh/#comment-181514 Doug Thu, 05 Feb 2009 01:49:26 +0000 http://www.canadiancapitalist.com/?p=1719#comment-181514 I agree that there is no conspiracy. However, there is a conflict of interest. In some ways it reminds me of the conflict of interest found in some financial firms between investment banking and stock analysis. I agree that there is no conspiracy. However, there is a conflict of interest. In some ways it reminds me of the conflict of interest found in some financial firms between investment banking and stock analysis.

]]> By: mjw2005 http://www.canadiancapitalist.com/bear-market-outperformance-eh/#comment-181510 mjw2005 Thu, 05 Feb 2009 01:37:03 +0000 http://www.canadiancapitalist.com/?p=1719#comment-181510 Mutual fund performance numbers are always reported after fees have been taken out Patch.... There is no conspiracry people....the numbers are the numbers let the MFs enjoy there quarter of outperformance....you don't need to worry.... all your index funds will be fine over the long term....guaranteeing you underperform the market by 0.15% or whatever the tiny MER of the ETF you are investing in..... Mutual fund performance numbers are always reported after fees have been taken out Patch….

There is no conspiracry people….the numbers are the numbers let the MFs enjoy there quarter of outperformance….you don’t need to worry…. all your index funds will be fine over the long term….guaranteeing you underperform the market by 0.15% or whatever the tiny MER of the ETF you are investing in…..

]]> By: Patch http://www.canadiancapitalist.com/bear-market-outperformance-eh/#comment-181489 Patch Wed, 04 Feb 2009 23:44:13 +0000 http://www.canadiancapitalist.com/?p=1719#comment-181489 Here's the same story from the National Post: http://network.nationalpost.com/np/blogs/tradingdesk/archive/2009/02/03/actively-managed-canadian-equity-funds-get-leg-up-on-index-in-q4.aspx It added this little tidbit: ...53.2% of actively-managed Canadian equity funds outperformed S&P/TSX Composite Index, with an average return of - 21.6% versus - 22.71 for the benchmark. So basically, the actively-managed funds "beat" the index by .93%. Too bad there's no mention of how fees destroy that advantage. Here’s the same story from the National Post:
http://network.nationalpost.com/np/blogs/tradingdesk/archive/2009/02/03/actively-managed-canadian-equity-funds-get-leg-up-on-index-in-q4.aspx

It added this little tidbit:
…53.2% of actively-managed Canadian equity funds outperformed S&P/TSX Composite Index, with an average return of – 21.6% versus – 22.71 for the benchmark.

So basically, the actively-managed funds “beat” the index by .93%. Too bad there’s no mention of how fees destroy that advantage.

]]> By: Novice http://www.canadiancapitalist.com/bear-market-outperformance-eh/#comment-181484 Novice Wed, 04 Feb 2009 21:26:49 +0000 http://www.canadiancapitalist.com/?p=1719#comment-181484 Michael - my point was that I'm more likely to believe it's a mistake or ineptitude versus an attempt at deliberately misleading the public because of a conspiracy of FI's and their advertising budget. I called it a mistake but ineptitude is a better word. Doug - nice to see a guy with a sense of humour. I find it hilarious when people get upset over anonymous postings on a website (Jay and Silent Bob Strike Back, anyone?) Michael – my point was that I’m more likely to believe it’s a mistake or ineptitude versus an attempt at deliberately misleading the public because of a conspiracy of FI’s and their advertising budget. I called it a mistake but ineptitude is a better word.

Doug – nice to see a guy with a sense of humour. I find it hilarious when people get upset over anonymous postings on a website (Jay and Silent Bob Strike Back, anyone?)

]]> By: Doug http://www.canadiancapitalist.com/bear-market-outperformance-eh/#comment-181480 Doug Wed, 04 Feb 2009 19:09:06 +0000 http://www.canadiancapitalist.com/?p=1719#comment-181480 Tht journalis may hav cos Candian investrs tans of thousnds of dollyrs Tht journalis may hav cos Candian investrs tans of thousnds of dollyrs

]]> By: Michael James http://www.canadiancapitalist.com/bear-market-outperformance-eh/#comment-181479 Michael James Wed, 04 Feb 2009 19:01:49 +0000 http://www.canadiancapitalist.com/?p=1719#comment-181479 Novice: I don't think we're agreeing completely. There is a difference between a mistake and ineptness. These "mistakes" happen so often that it is clear that some headline writers are consistently overworked, careless, or incompetent. It's also clear that those in charge of running newspapers simply don't care enough to fix the problem. This is probably the right call. I doubt that there would be enough financial payback to compensate for the cost of doing a better job on headline writing. Novice: I don’t think we’re agreeing completely. There is a difference between a mistake and ineptness. These “mistakes” happen so often that it is clear that some headline writers are consistently overworked, careless, or incompetent. It’s also clear that those in charge of running newspapers simply don’t care enough to fix the problem. This is probably the right call. I doubt that there would be enough financial payback to compensate for the cost of doing a better job on headline writing.

]]> By: Novice http://www.canadiancapitalist.com/bear-market-outperformance-eh/#comment-181478 Novice Wed, 04 Feb 2009 18:54:08 +0000 http://www.canadiancapitalist.com/?p=1719#comment-181478 I agree, it's best to chalk something up as a mistake sometimes - though as Winston Churchill said "Once is a coincidence, twice is happenstance, and thrice is enemy action." P.S. Doug I found it amusing that you're belittling a journalist in the same sentence in which you typed "From" incorrectly (hee hee). I agree, it’s best to chalk something up as a mistake sometimes – though as Winston Churchill said “Once is a coincidence, twice is happenstance, and thrice is enemy action.”

P.S. Doug I found it amusing that you’re belittling a journalist in the same sentence in which you typed “From” incorrectly (hee hee).

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