Comments on: If You Seek Alpha, You May Want to Look Elsewhere…

By: From the archives: Horizon AlphaPro Managed S&P/TSX 60 ETF (HAX) | Canadian Capitalist

Wed, 04 Aug 2010 01:35:33 +0000

[...] first wrote about the introduction of the Horizon AlphaPro Managed S&P/TSX 60 ETF [TSX: HAX] (If You Seek Alpha, You May Want to Look Elsewhere, Jan. 13, 2009), I was skeptical that the fund’s tactical allocation can deliver [...]

By: Thicken My Wallet » Blog Archive » Are ETF’s contracting Mutual Fund-itis?

Thu, 12 Feb 2009 08:59:35 +0000

[...] One of the most egregious of these offenders appears to be an actively traded ETF with a 0.70% MER and a 0.20% potential bonus to the manager. As Canadian Capitalist reported, this ETF appears to be a mutual fund in ETF’s clothing. [...]

By: An Example of the Perils of Tactical Asset Allocation

An Example of the Perils of Tactical Asset Allocation — Wed, 14 Jan 2009 14:20:50 +0000

[...] Contact ← If You Seek Alpha, You May Want to Look Elsewhere… [...]

By: Canadian Capitalist

Canadian Capitalist — Wed, 14 Jan 2009 13:30:58 +0000

Dillion: Good point. Ross Healy was indeed the advisor to the old fund but the fund objectives are similar. Reading the past annual reports indicates that the fund employed TA and market timing in the past as well. Even if the advisor had been the same, I would discount past performance, which is a poor indicator of future returns.

By: Dillon

Dillon — Tue, 13 Jan 2009 22:36:57 +0000

I think the old Accumulus Talisman fund was managed by Ross Healy. The new HAX ETF will apparently be managed based on inputs from Ron Meisels. If you watch BNN, you might be aware that the investment style of these two individuals is very different (Healy relies on fundamental analysis whereas Meisels focuses on technical analysis). Because of this change, I expect the history of this particular fund/ETF is probably meaningless.

The fee structure, however, is not meaningless. As your post implies, investors would be well served to avoid HAX.

By: EconStudent

EconStudent — Tue, 13 Jan 2009 21:29:15 +0000

I think the intention here is to create a basic hedge fund in the form of etf. If you are not comfortable with the notion of hedge funds, you should not touch this etf either. My guess is that a fundamental index might work a bit better.

By: Silicon Prairie

Silicon Prairie — Tue, 13 Jan 2009 19:02:40 +0000

It’s interesting to note that all it talks about is finding profitable companies and upward momentum – no mention of whether they consider if they’re paying a fair price for the investment, or one that actually leaves room for future growth. In truth if investors buy into this because they like what they hear they are as much to blame as the managers.

There is one good thing though – the growing number of actively managed ETFs may give investors more opportunities to short them or make other trades to profit from the performance gap. Since the underperformance of active management is one of the most consistent effects in finance the emergence of these new ETFs could be a good thing.

By: Matt Simms

Matt Simms — Tue, 13 Jan 2009 16:46:44 +0000

There should be no fees when there is a loss.

By: Fred

Fred — Tue, 13 Jan 2009 15:48:28 +0000

CC:

I haven’t read the prospectus but I think in the industry a fee of 20% of outperformance is normal with no bonus when there is a loss.

By: Charles

Charles — Tue, 13 Jan 2009 15:47:36 +0000

@Dividend Growth Investor: While I appreciate your input, it is a cruel and utter tease to keep reminding Canadians of brokerage options we don’t have. None of our online brokerages have free stock trades, and we are not allowed to sign up with American sites. And I’ve seen you make comments like this on Canadian blogs before, too