Comments on: Mackenzie hits back at ETFs, Part 1 http://www.canadiancapitalist.com/mackenzie-hits-back-at-etfs-part-1/ Helping you invest and prosper Thu, 18 Mar 2010 02:41:19 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: New PowerShares Mutual Funds | Canadian Capitalist http://www.canadiancapitalist.com/mackenzie-hits-back-at-etfs-part-1/#comment-204021 New PowerShares Mutual Funds | Canadian Capitalist Tue, 17 Nov 2009 14:32:41 +0000 http://www.canadiancapitalist.com/?p=3068#comment-204021 [...] 17th, 2009 · No Comments Unlike Mackenzie, which opted for a strategy of attacking the enemy, Invesco Trimark is adopting a strategy that can only be described as “if you can’t [...] [...] 17th, 2009 · No Comments Unlike Mackenzie, which opted for a strategy of attacking the enemy, Invesco Trimark is adopting a strategy that can only be described as “if you can’t [...]

]]> By: IntelligentSpeculator http://www.canadiancapitalist.com/mackenzie-hits-back-at-etfs-part-1/#comment-203037 IntelligentSpeculator Tue, 03 Nov 2009 02:56:04 +0000 http://www.canadiancapitalist.com/?p=3068#comment-203037 exactly mj, I agree 100%.. It's kind of easy to make examples with 25$ commissions and monthly trades.. I had published this 5 year return comparison between Index, ETF and mutual fund (on TSX60.. which is a lot easier to follow than MSCI world indexes).. Index: SPTSX60 = 56.73% ETF: XIU = 55.70% Mut fund: ALTAMIRA = 52.80% check out more at: http://www.intelligentspeculator.net/investing_commentary/top-10-reasons-etfs-are-superior-to-mutual-funds/ exactly mj, I agree 100%.. It’s kind of easy to make examples with 25$ commissions and monthly trades..

I had published this 5 year return comparison between Index, ETF and mutual fund (on TSX60.. which is a lot easier to follow than MSCI world indexes)..

Index: SPTSX60 = 56.73%
ETF: XIU = 55.70%
Mut fund: ALTAMIRA = 52.80%

check out more at:

http://www.intelligentspeculator.net/investing_commentary/top-10-reasons-etfs-are-superior-to-mutual-funds/

]]> By: mj http://www.canadiancapitalist.com/mackenzie-hits-back-at-etfs-part-1/#comment-203012 mj Mon, 02 Nov 2009 21:26:26 +0000 http://www.canadiancapitalist.com/?p=3068#comment-203012 Here's another "real-world" example: I pay an average MER of 0.20% and $5 a trade . The chance of Mackenzie outperforming the index by well over 2% per year in the long run to make up for their 2.50% MER, is, well, let's just call it ZERO. Here’s another “real-world” example: I pay an average MER of 0.20% and $5 a trade . The chance of Mackenzie outperforming the index by well over 2% per year in the long run to make up for their 2.50% MER, is, well, let’s just call it ZERO.

]]> By: Henry http://www.canadiancapitalist.com/mackenzie-hits-back-at-etfs-part-1/#comment-202996 Henry Mon, 02 Nov 2009 18:04:27 +0000 http://www.canadiancapitalist.com/?p=3068#comment-202996 CC: I am really surprised that the Emerging Market stocks did not improve ACWI returns significantly. I guess that market timing must be used with Emerging Market stocks. Rob: I have no idea how to find MSCI data in Canadian dollars. I don't understand why Morningstar and Globefund do not provide MSCI ACWI in CAD. CC: I am really surprised that the Emerging Market stocks did not improve ACWI returns significantly. I guess that market timing must be used with Emerging Market stocks.

Rob: I have no idea how to find MSCI data in Canadian dollars. I don’t understand why Morningstar and Globefund do not provide MSCI ACWI in CAD.

]]> By: Rob http://www.canadiancapitalist.com/mackenzie-hits-back-at-etfs-part-1/#comment-202988 Rob Mon, 02 Nov 2009 16:44:02 +0000 http://www.canadiancapitalist.com/?p=3068#comment-202988 The benchmarks should be those indexes in CANADIAN dollars since that is the currency the Canadian funds have to report in. The alternative strategy is to look at the US$ versions of the funds and compare those to the US$ version sof the benchmark. This is something Morningstar and Globefund haven't really figured out yet since they give the Canadian $ and US$ versions of the same fund different rankings. It is very tough to find MSCI data in Canadian dollars - you can make it your self of course but that is time consuming. The benchmarks should be those indexes in CANADIAN dollars since that is the currency the Canadian funds have to report in.

The alternative strategy is to look at the US$ versions of the funds and compare those to the US$ version sof the benchmark.

This is something Morningstar and Globefund haven’t really figured out yet since they give the Canadian $ and US$ versions of the same fund different rankings.

It is very tough to find MSCI data in Canadian dollars – you can make it your self of course but that is time consuming.

]]> By: Canadian Capitalist http://www.canadiancapitalist.com/mackenzie-hits-back-at-etfs-part-1/#comment-202986 Canadian Capitalist Mon, 02 Nov 2009 16:19:27 +0000 http://www.canadiancapitalist.com/?p=3068#comment-202986 @Henry: According to MSCI, the All-Country World Index (ACWI) returned -1.07% in USD over the 10-year period to July 31, 2009. MSCI World Index returned -1.66% in USD over the same time period. The ACWI did better than MSCI World but not that much better. http://www.mscibarra.com/products/indices/stdindex/performance.html But I agree with your point. As Cundill holds emerging market equities, the benchmark to be used should be MSCI ACWI. @Matt: I avoid the specialized ETFs. @CanadianInvestor: I suppose it is easier spreading misinformation than actually competing by cutting fees. @Henry: According to MSCI, the All-Country World Index (ACWI) returned -1.07% in USD over the 10-year period to July 31, 2009. MSCI World Index returned -1.66% in USD over the same time period. The ACWI did better than MSCI World but not that much better.

http://www.mscibarra.com/products/indices/stdindex/performance.html

But I agree with your point. As Cundill holds emerging market equities, the benchmark to be used should be MSCI ACWI.

@Matt: I avoid the specialized ETFs.

@CanadianInvestor: I suppose it is easier spreading misinformation than actually competing by cutting fees.

]]> By: Henry http://www.canadiancapitalist.com/mackenzie-hits-back-at-etfs-part-1/#comment-202981 Henry Mon, 02 Nov 2009 15:42:41 +0000 http://www.canadiancapitalist.com/?p=3068#comment-202981 One of my pet peeves is that Cundill Value uses the wrong benchmark. Cundill Value invests in emerging market stocks as well as developed market stocks. Since the 2003 launch of MSCI All Country World Index (ACWI) that includes both developed and emerging markets, Cundill Value's benchmark should have been changed from MSCI World Index (no emerging market stocks) to MSCI ACWI (emerging market stocks included. My gut feeling is that Cundill Value underperforms MSCI ACWI in Canadian dollars, since emerging markets performed really well in the last few years. One of my pet peeves is that Cundill Value uses the wrong benchmark. Cundill Value invests in emerging market stocks as well as developed market stocks. Since the 2003 launch of MSCI All Country World Index (ACWI) that includes both developed and emerging markets, Cundill Value’s benchmark should have been changed from MSCI World Index (no emerging market stocks) to MSCI ACWI (emerging market stocks included.

My gut feeling is that Cundill Value underperforms MSCI ACWI in Canadian dollars, since emerging markets performed really well in the last few years.

]]> By: Matt http://www.canadiancapitalist.com/mackenzie-hits-back-at-etfs-part-1/#comment-202980 Matt Mon, 02 Nov 2009 15:28:57 +0000 http://www.canadiancapitalist.com/?p=3068#comment-202980 Another curious person here: Do you folks practise buy and hold with the mainstream ETFs, and then play with the more specialized ones? Another curious person here: Do you folks practise buy and hold with the mainstream ETFs, and then play with the more specialized ones?

]]> By: Canadian Capitalist http://www.canadiancapitalist.com/mackenzie-hits-back-at-etfs-part-1/#comment-202974 Canadian Capitalist Mon, 02 Nov 2009 14:05:20 +0000 http://www.canadiancapitalist.com/?p=3068#comment-202974 @Charles: It is interesting to see that the "10 Largest Funds" table is already different between Jan. 31, 2009 and July 31, 2009. It is not clear to me which funds the 8th and 10th Largest competitor refers to. But Dynamic Global Value (#9 in the July 31st list) did not show up in the Jan 31st list. Unfortunately, I don't have access to a database of largest funds 10 years ago. It would certainly be an interesting exercise. @Jason: We've discussed amortizing trading costs many times, so I skipped it for the sake of brevity. Instead of tracking trading costs of each ETF separately, I calculate it as: trading expenses = total trading costs of portfolio / year-end market value of portfolio It gives a rough idea of the impact of trading commissions on the portfolio. @Charles: It is interesting to see that the “10 Largest Funds” table is already different between Jan. 31, 2009 and July 31, 2009. It is not clear to me which funds the 8th and 10th Largest competitor refers to. But Dynamic Global Value (#9 in the July 31st list) did not show up in the Jan 31st list. Unfortunately, I don’t have access to a database of largest funds 10 years ago. It would certainly be an interesting exercise.

@Jason: We’ve discussed amortizing trading costs many times, so I skipped it for the sake of brevity. Instead of tracking trading costs of each ETF separately, I calculate it as:

trading expenses = total trading costs of portfolio / year-end market value of portfolio

It gives a rough idea of the impact of trading commissions on the portfolio.

]]> By: CanadianInvestor http://www.canadiancapitalist.com/mackenzie-hits-back-at-etfs-part-1/#comment-202973 CanadianInvestor Mon, 02 Nov 2009 14:04:43 +0000 http://www.canadiancapitalist.com/?p=3068#comment-202973 Aw shucks, saw your headline then figured they had hit back by lowering their fees. Aw shucks, saw your headline then figured they had hit back by lowering their fees.

]]>