There are loads of mutual funds that have done well for investors.
We can’t ever know what they’re going to be ahead of time, but after the fact, we can applaud them for having skilled managers or dismiss their performances as lucky.
Here’s my challenge to you.
I believe that companies selling actively managed mutual funds are incredibly profitable for their shareholders. They sell expensive products that benefit the institutions first, with the investor a distant second. My thesis is that their stocks (over 20+ years) have outperformed their best long term mutual funds, when reinvesting dividends for both the stocks and the funds.
Find a Canadian example that proves me wrong before June 1st, 2010, and I’ll mail you a crisp $10 bill.*
Let’s have a look at the best long term stock market mutual fund offered by The Royal Bank of Canada—the RBC Canadian dividend fund.
Since 1993, it has appreciated by roughly 437%. That’s superb!
As for the institution that created it, how has it performed since 1993?
I have the data from 1995 below. And the stock for the Royal Bank of Canada has increased by 1000% since then. The shareholders of the bank’s stock have easily beaten the investment performance of the people who have bought the bank’s investment products, over the long term.
How about another example? Without even reinvesting dividends, the TD Bank has appreciated by 775% since 1995. Find the 20 year data, and show me that one of TD’s stock funds has beaten the TD Bank stock since 1990, and I’ll mail you that well-deserved $10 bill.
Maybe you’ll get lucky to find an Investor’s Group fund that has beaten its parent company, Power Corp. I only dug up data back to 1995, but dig back to 1990 and find one of Investors Group’s mutual funds that has beaten this stock and I’ll send you that $10 bill. Since 1995, this company’s stock is up 650%, not including reinvested dividends.
Here’s your list of Canadian mutual fund companies to get you started on the hunt.
They don’t all have publically traded stock available, so weed through those that do.
And don’t forget. We’re looking at the past 20 years. If you’re the first to find one, let me send you that $10 bill!
- IGM Financial (InvestorsGroup & Mackenzie):
- Royal Bank of Canada (RBC Asset Management):
- CI Fund Management Inc. (CI Mutual Funds Inc.):
- Toronto-Dominion Bank (TD Asset Management):
- AMVESCAP (AIM Trimark):
- Canadian Imperial Bank of Commerce (CIBC Asset Management):
- FMR Corporation (Fidelity):
- Bank of Montreal (BMO Investments/Guardian Group of Funds):
- AGF Management Limited (AGF Funds):
- Franklin Resources (Franklin Templeton Investments):
- Phillips Hager & North Ltd.:
- Dundee Corporation (Dynamic):
- Bank of Nova Scotia:
- CMA Holdings Incorporated:
- National Bank of Canada (Natcan/Altamira):
- Fédération des caisses Desjardins du Québec:
- Industrial Alliance Insurance and Financial Services Inc.:
- Brandes Investment Partners:
- HSBC (Canada) Investments:
- Standard Life:
- Acuity Funds:
- Saxon Financial:
- Ethical Funds Inc.:
- Mawer Investment Management:
- Sentry Select Capital Corp.:
- Sceptre Investment Counsel:
* Note: $10 will be paid to each person who finds a specific (and not previously selected) Canadian mutual fund where the mutual fund has out-performed the mutual fund company’s stock for the past 20 years (Ends 31st May 2010).