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FEATURE ARTICLE
active management in terms of return. That said, it's
important to pay attention to the following points:
- Passive management using EFTs risks generat-
ing management fees. Do these fees erase the
gain?
- Return is important, but the advice of a finan-
cial planner or tax specialist must be taken
into consideration. These services are gener-
ally offered to high-value clients. Their fees are
therefore included, in a way, in the offer of the
financial institution that is offering the mutual
funds.
- Are independent investors who decide to in
-
vest in EFTs in order to pay less in manage-
ment fees making the right decisions for their
investments? What about the diversification
of their portfolio? Or their retirement planning
strategy? Or their tax strategy?
The debate between active and passive manage
-
ment is still open, and it's up to investors to choose.
Report 1: Percentage of Funds Underperforming Their Benchmarks
FUND CATEGORY COMPARISON INDEX 1-YEAR (%) 3-YEAR (%) 5-YEAR (%) 10-YEAR (%)
Canadian Equity S&P/TSX Composite 87,50 91,07 98,63 84,29
Canadian Small-/MidCap Equity S&P/TSX Completion 22,22 70,59 91,43 65,31
Canadian Dividend & Income Equity S&P/TSX Canadian Dividend
Aristocrats Index
44,19 76,92 84,91 90,63
U.S. Equity S&P 500 (CAD) 69,07 83,49 89,08 95,15
International Equity S&P EPAC LargeMidCap (CAD) 60,00 69,64 77,61 84,48
Global Equity S&P Developed LargeMidCap (CAD) 77,78 85,19 90,45 94,19
Canadian Focused Equity 50% S&P/TSX Composite + 25%
S&P 500 (CAD) + 25% S&P EPAC
LargeMidCap (CAD)
70,69 90,91 94,44 96,88
Source: https://www.spglobal.com/spdji/en/documents/spiva/spiva-canada-scorecard-year-end-2020.pdf.
Table 2
