In Canada I wanted to invest in the TD TAV ETF which, although still market-cap weighted, did not use market-cap as a factor in their selection process. My only choice then would be to go with XIC, which I kind of like better now that it is tracking the S&P/TSX Composite. Ideally I would invest in Ross Healy’s recommendations or buy a mutual fund from ABC. Unfortunately I don’t have enough money yet to do that. I do not know of many good actively managed Canadian mutual funds. There were a few at TD that did pretty well (TD Dividend Growth sticks out in my mind, and TD Canadian Blue Chip Equity as well), although I haven’t looked at them in detail. ie. I only know their past performance was pretty good, but I have no idea how they have done compared to the indexes in good years and in bad, nor do I know who the managers are/were.

For international markets, my advisor prefers mutual funds to indexes anyways so we will be using active management for my international component.

Great post. I certainly agree with you that non-market cap weighted index funds make a lot of sense. As an intelligent investor, you can only hope that a few fund companies will present you with more “index” investing options in the near future.

If you’re not satisfied with with market cap weighted indexes, and you’re not satisfied putting your money in the hands of active fund managers–what do you recommend doing with your money?