Investorial

Coming back from a month of vacationing, I needed to catch up on all the past financial headlines. But I could care less about the recent China markets situation, or the Canadian Federal bank decision on Canadian interest rate. My mind’s still in vacation mode, I suppose… but the bargain hunter in me loves hearing about good deals, and the fact that PH&N is now making its products more accessible to Canadian investors was a headline I naturally gravitated towards.

I’ve previously blogged on how I loved PH&N - a Canadian investment management firm possessing a terrific reputation. On July 2^nd, PH&N will launch B and F series of their funds. Their elitist minimum investment restriction lowered to $5,000 from $25,000. Compared to its Canadian peers, its funds bear MER costs that are well below the industry standard. Isn’t that a refreshing concept to hear from an investment company? (more…)

One of the ways to monitor investment trends is to find out how they are marketed. Mutual fund names are often a good indication of how fund companies wish to reach their target investors. Remember those days when every mutual fund wanted to add the word “tech” into their name? For a while, everybody wanted to be involved in “nano-tech”, “real estate”. When dividend and value investing styles swung back into admiration, funds were tripping over themselves to make those two words show up.

It’s no surprise that “income trust” was also a hot naming convention for Canadian mutual funds, but the recent income trust melt-down due to new Canadian government tax law proposals have dampen those feelings. CIBC Asset Management has just renamed two of its income trust funds with a shady wolf-in-sheep’s clothing intent. (more…)

Canadian investors really treat our big banks and their mutual funds as angels. While our American friends keep the pressure on fund companies to lower MERs, Canadians cannot see through the devil’s disguise. I wouldn’t mind as much if those funds performed well, but their abysmal net returns makes me wonder why they can justify those high fees? Our investment watchdogs north of the border have failed in affecting mutual fund fee changes. But instead of playing the victim, why not step up and try to be a solution to the problem? This is the first installment of a series called Canadian Banks / Mutual Funds Watch, that I intend to develop on-going. (more…)

Ross Healy is the chariman and CEO of Strategic Analysis Corporation, an investment advisory firm. Though I feel at times, that Ross’s comments are too politically correct, too on the fence, I still recognize that Ross is very much respected in the Canadian investment scene. Ross is best known for his bearish call on Nortel when it was trading over $100 in 2000. As of June 2006, Strategic Analysis Corporation’s model portfolio has outperformed the S&P/TSX Total Return index to a tune of 20.9% to 11.7% since its 1993 inception.

If you haven’t yet, you should start by reading Deep Value Face-Off - Part 1 first! (more…)

Mutual funds are still the no-brainer solution for the average joe who couldn’t care less about reading financial statements, or spend the time day-trading. Much “marketing” debate has been made about management fees. They’re not wrong to be critical but everything is really dependent on the “net” returns you’re able to achieve. My only concern is that consumers do the minimum work of researching the track-record of the fund and the fund manager. A long, consistent and positive tracking record is a must for active-managed funds.

But when John Bogle, founder of Vanguard, decided to balk the norms of the financial industry and aggressively market passive index funds, it was a strong indictment on the vast majority of managers who fail to beat their corresponding benchmark indexes. Vanguard’s promotion of this strategy still trumpets strongly, but there are signs of shifting towards actively managing their index funds, even if it’s just a little bit! (more…)

When it comes to investing columns, thank goodness for the cynics! I’m not just saying that because I’m also a cynic, but along with positive news often comes a lot of hype and fluff. Cynics have the unenviable task of having to prove their negative assertions by rigorous research and logical explanations more so than their salesmen-like counterparts!

I’ve been looking for an opportunity to introduce Chuck Jaffe’s writing to my readers, and his recent article about fund manager cover-up phrases really enlightened me to the politically correct double-talk that fund managers engaged in. I’ll preface by saying I don’t expect fund managers to bury their heads in financial statements every minute of their work hour. But when they start to sound more like salesmen rather than an investor. You better believe I will reconsider where I put my money. (more…)

If you often read news articles or blogs about investments or personal finance topics, you’ll notice they love to offer to consumers tips, advices, and how-to’s. They’re meant to be informative pieces. But have you ever wondered what the industry players may write and read amongst themselves?

Take for example, this article on Advisor.ca talking up the merits of life-cycle funds and how they may benefit the various distribution channels. That’s right, not investors but distribution channels! You shouldn’t be surprised that the mutual fund industry is all about sales. How else could you explain the number of funds existing and created each year? It’s like all the varieties of mp3 players that keep popping up. Just create a new variety and market it! And marketing is the key to winning this game! Therefore, fund companies have to market to distribution channels via such articles.

Let’s dissect some of the more memorable articles quotes in a tongue-in-cheek manner (a la Jon Stewart), shall we? (more…)

Doesn’t it warm your heart seeing those kids grow up right in front of your eyes? I remember when mutual funds were plain-jane investment vehicles. Then came sector/industry funds, followed by asset-allocation funds, fund-of-funds, life-cycle funds. Each evolution becoming more exotic than the last incarnation — not as a way to provide better returns for investor, but as marketing gimmicks to attract investor capital.

ETFs are now heading down the same path. Arriving first on the scene were boring old index ETFs, then came currency ETFs, fixed income ETFs, and precious metal ETFs. The latest version from ProFunds has stirred some talk around the financial blogosophere (found here, here and here) and even prompted a MarketWatch article; where I first read about leveraged ETFs. I have strong feelings about ETF’s new brother, and also the way they are marketing it. Care to hear my opinion? (more…)