Andrew Hallam

Harry’s model index account continues to make actively managed accounts look bad.

In August of 2008, our friend Harry kissed good-bye to the expensive financial products that his advisor sold him. With annual expense ratio fees of 2.6% for his Canadian mutual funds, adding with an estimated hidden fund cost of a further 0.75% per year for the fund’s expenses related to buying and selling stocks within the fund, Harry’s investments were costing him more than 3.5% annually.

For Canadian mutual funds, these costs would be about average. But Harry didn’t want to be average. He wanted to follow a simple principle designated statistically superior by virtually every academic study that has ever been done on mutual funds. Harry wanted to buy products called Index Funds. They are cheap, diversified, and nobody but Harry stands to benefit from them when Harry makes his purchase.

You can follow his story and ongoing progress at Indexes Win! from the drop down menu above.