Comments on: The Average Actively Managed Fund Must Underperform the Index http://www.investingintelligently.com/2007/10/19/the-average-actively-managed-fund-must-underperform-the-index/ Not just another (Canadian) financial blog Sat, 16 Oct 2010 15:22:19 -0700 http://wordpress.org/?v= hourly 1 By: Dave http://www.investingintelligently.com/2007/10/19/the-average-actively-managed-fund-must-underperform-the-index/comment-page-1/#comment-7655 Dave Thu, 10 Jan 2008 07:03:07 +0000 http://www.investingintelligently.com/2007/10/19/the-average-actively-managed-fund-must-underperform-the-index/#comment-7655 Good point Bill, I don't think I had noticed that. Good point Bill, I don’t think I had noticed that.

]]> By: Bill http://www.investingintelligently.com/2007/10/19/the-average-actively-managed-fund-must-underperform-the-index/comment-page-1/#comment-7654 Bill Thu, 10 Jan 2008 04:08:30 +0000 http://www.investingintelligently.com/2007/10/19/the-average-actively-managed-fund-must-underperform-the-index/#comment-7654 And look at the Beta of the 5 active funds that beat the index -- all took on more risk than the index fund. And look at the Beta of the 5 active funds that beat the index — all took on more risk than the index fund.

]]> By: This and That http://www.investingintelligently.com/2007/10/19/the-average-actively-managed-fund-must-underperform-the-index/comment-page-1/#comment-7170 This and That Fri, 26 Oct 2007 03:20:54 +0000 http://www.investingintelligently.com/2007/10/19/the-average-actively-managed-fund-must-underperform-the-index/#comment-7170 [...] out that a grand total of 5 mutual funds managed to beat the iShares CDN Composite Index ETF. Investing Intelligently and Four Pillars blogged about the findings in Rob’s [...] [...] out that a grand total of 5 mutual funds managed to beat the iShares CDN Composite Index ETF. Investing Intelligently and Four Pillars blogged about the findings in Rob’s [...]

]]> By: Y HAT http://www.investingintelligently.com/2007/10/19/the-average-actively-managed-fund-must-underperform-the-index/comment-page-1/#comment-7154 Y HAT Sun, 21 Oct 2007 00:15:38 +0000 http://www.investingintelligently.com/2007/10/19/the-average-actively-managed-fund-must-underperform-the-index/#comment-7154 Dave, You're right. I didn't consider the MER. Dave,

You’re right. I didn’t consider the MER.

]]> By: Dave http://www.investingintelligently.com/2007/10/19/the-average-actively-managed-fund-must-underperform-the-index/comment-page-1/#comment-7153 Dave Sat, 20 Oct 2007 23:29:59 +0000 http://www.investingintelligently.com/2007/10/19/the-average-actively-managed-fund-must-underperform-the-index/#comment-7153 The Dividend Guy, there is a lot of merit to your strategy of buying stocks (dividend paying stocks or not) on the basis of low costs. As long as your turnover is low and you don't spend too much on commissions your annual expenses could theoretically be lower than the average ETF, thus maximizing returns. The Dividend Guy, there is a lot of merit to your strategy of buying stocks (dividend paying stocks or not) on the basis of low costs. As long as your turnover is low and you don’t spend too much on commissions your annual expenses could theoretically be lower than the average ETF, thus maximizing returns.

]]> By: Dave http://www.investingintelligently.com/2007/10/19/the-average-actively-managed-fund-must-underperform-the-index/comment-page-1/#comment-7152 Dave Sat, 20 Oct 2007 23:27:46 +0000 http://www.investingintelligently.com/2007/10/19/the-average-actively-managed-fund-must-underperform-the-index/#comment-7152 Y Hat, you are perfectly right that XIC would be in the middle of that list <em>if we looked at pre-MER returns</em>. But these returns are the returns are the returns actually seen by investor so they include MERs (ie. they are annualized percentage change in the NAV). Y Hat, you are perfectly right that XIC would be in the middle of that list if we looked at pre-MER returns. But these returns are the returns are the returns actually seen by investor so they include MERs (ie. they are annualized percentage change in the NAV).

]]> By: Y HAT http://www.investingintelligently.com/2007/10/19/the-average-actively-managed-fund-must-underperform-the-index/comment-page-1/#comment-7150 Y HAT Sat, 20 Oct 2007 20:48:46 +0000 http://www.investingintelligently.com/2007/10/19/the-average-actively-managed-fund-must-underperform-the-index/#comment-7150 Wow. You would think that XIC would be in the middle of that list given that it replicates the TSX. If Canadian equity funds set the TSX as their bench mark, one would think that on average they would meet that benchmark (with half of them below/above the benchmark). I'm surprised that only 5 beat XIC. Those stats are a little embarrassing for the mutual fund industry. Y HAT Wow. You would think that XIC would be in the middle of that list given that it replicates the TSX. If Canadian equity funds set the TSX as their bench mark, one would think that on average they would meet that benchmark (with half of them below/above the benchmark). I’m surprised that only 5 beat XIC. Those stats are a little embarrassing for the mutual fund industry.

Y HAT

]]> By: The Dividend Guy http://www.investingintelligently.com/2007/10/19/the-average-actively-managed-fund-must-underperform-the-index/comment-page-1/#comment-7149 The Dividend Guy Sat, 20 Oct 2007 13:39:26 +0000 http://www.investingintelligently.com/2007/10/19/the-average-actively-managed-fund-must-underperform-the-index/#comment-7149 It is amazing to me that so many people continue to pour money into mutual funds. That is what I invest in companies like IGM Financial - I get the benefit of the MER's through my dividends and share appreciation. Good post. The Dividend Guy It is amazing to me that so many people continue to pour money into mutual funds. That is what I invest in companies like IGM Financial – I get the benefit of the MER’s through my dividends and share appreciation.

Good post.

The Dividend Guy

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