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Reader Question: Recommended Mutual Funds
Fab, the webmaster @ Rat Race Players (one of our charity sponsors), emailed me regarding some mutual funds that I would recommend. As many of you know, I am not a financial advisor, and I do not make formal recommendations. However, with that said, I will discuss some of my favorite mutual funds.
First off, mutual funds can be expensive in the long run, and 80% of mutual fund managers do NOT beat the market. Thus, if you believe in statistics, you are probably better off investing in low cost index funds or ETF’s for the long haul.
However, I still like a few mutual funds. In my opinion, I believe the key to a successful mutual fund is the mutual fund manager. Below are some mutual funds that I like:
- Francis Chou has a long track record of beating the market. He is a deep value investor who follows a similar investment strategy to Warren Buffet.
- This fund is a bit expensive, but has a beaten the index over the past 5 years with impressive returns.
Big Bank Monthly Income Funds (CIBC, TD, BMO etc..)
- As a fan of dividend investing, I like steady growers like the income funds offered by the big banks. Most of the MER’s involved are fairly low and are steady performers.
- I like the PH&N family of funds as they are steady performers with reasonable MER’s.
Note that post performance does not indicate future results.
To screen mutual funds, I use:
As I’m not a huge mutual fund investor, my knowledge is limited. Which mutual funds do you like and why?
6 Comments, Comment or Ping
1. Mike
I would recommend the TD Online index funds - lowest costs all around.
CC had a good post about this
http://www.canadiancapitalist.com/2007/05/02/low-fee-mutual-funds
May 9th, 2007 @ 6:07 pm
2. FrugalTrader
Good call Mike. I actually have an upcoming article on the subject.
May 9th, 2007 @ 7:47 pm
3. Fab
Thanks FrugalTrader for discussing mutual funds.
I read somewhere that monthly income funds are more suitable for non registered portfolio… but don’t really get why it would be?
When looking at the performance of a fund, are the fees (MER) removed already?
I just tried GlobeFund.ca : nice! Better than stockhouse.ca which I discovered a few days ago.
May 9th, 2007 @ 11:30 pm
4. Mike
Thanks FT.
Fab - the reported performance of mutual funds is always after all the fees are deducted (which is one of the reasons why they are supposedly ‘hidden’).
I think income funds would be better in an rrsp.
May 10th, 2007 @ 12:31 am
5. ThickenMyWallet
I remember John Reynolds, author of the Naked Investor, saying in a television interview that the Saxon family of funds is worth exploring (he also mentioned PH&N).
May 10th, 2007 @ 1:05 pm
6. FrugalTrader
Fab: Whether or not income funds are better in/out of your RRSP depends on your financial situation and the fund itself. Check out my investment tax articles and see where it would work better for you. In general, if you have a regular employment income, it will probably work out better if those income funds were held inside your RRSP. However, if you live in BC, you can make up to $70k in employment income and dividends without being taxed in the dividends.
May 10th, 2007 @ 3:52 pm
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