Index funds are mutual funds or exchange-traded funds (ETFs) that invest to equal the performance of a market index, such as the S&P/TSX 60.). Index funds do show better long-term performance than about two-thirds of actively-managed mutual funds with long-term track records.
That’s partly because index fund fees run as low as 0.12% of assets per year. In our view, the big advantage of Canadian index funds is that they can help you avoid the risk of choosing a fund with a management style that virtually guarantees below-average long-term performance.
In that category we’d place mutual funds that pursue a market timing or sector-rotation approach to investing. Managers of these funds try to out-perform the market by betting on relatively short-term trends, rather than putting their investors in a position to profit from long-term growth in the economy. In any one year, the top fund is often run by a market timer who is having his or her proverbial ‘day in the sun’. However, in any one decade, the top funds are run by conservative managers who focus on long-term growth in the economy.
We still feel that most investors will profit the most by holding a well-balanced portfolio of high-quality stocks that follow our three-part Successful Investor strategy. However, if you don’t want to build a portfolio, then index fund mutual funds or ETFs can provide a good alternative. Here is our three-part strategy:
Discover which stocks to buy and hold forever in your portfolio in this FREE special report, 10 Stocks to Buy and Hold Forever.
What are index funds and what are the main benefits (and risks) for investors?
What are index funds? Index funds are mutual funds or exchange-traded funds (ETFs) that invest to equal the performance of a market index.
Here are the types of index funds to be aware… Read More
Discover the pros and cons of index investing with both mutual funds and exchange traded funds (ETFs)
Index investing has both advantages and disadvantages. However, is index investing really a good overall strategy for growth investors?
In this article we look at both mutual funds and ETFs… Read More
In the second in our series on RRSPs, an explanation of which investments will help you maximize the tax advantages of your RRSP, and which are better left out.
As we stated in last week’s article on RRSPs (What you need to know to build… Read More
These two ETFs offer low-fee exposure to China’s top companies, but economic uncertainty in the near-term may challenge their growth.
Chinese stocks have rebounded around 33% from their February 2016 lows. But they are still well below their mid-2015 highs.
While the economy grew 6.7% in the… Read More
These low-fee ETFs track major indexes and give investors access to today’s most widely traded U.S. stocks.
These ETFs hold mostly blue chip, widely traded stocks on U.S. exchanges. All of them mirror, or track, the performance of major stock market indexes. That’s opposed to… Read More
Five tips for selecting the best Canadian funds to improve your stock market returns.
The best Canadian funds are specialized ETFs that aim to equal the performance of a leading Canadian market index, such as the S&P/TSX 60.
The best Canadian funds do show better… Read More
Dividends can be the secret to turning an average portfolio into a strong, fast-growing one. Over the years, our careful, systematic approach to investing has emphasized the central role of dividends in a successful portfolio. Now we have put together our complete… Read More
Today we release a new report—our guide to investing in ETFs. To make the most of ETFs today, you need to know the important difference between the newer ETFs and the original ETFs—to “keep it simple” in other words. That’s why … Read More
The Global X Social Media ETF provides a low-cost way of investing in ‘social media’ stocks. But many of those companies are in the broker/media limelight, meaning now may not be a good time to buy.
GLOBAL X SOCIAL MEDIA ETF (symbol… Read More
Index mutual funds can provide a low-cost way to invest in the stock market. However, they have disadvantages and there are better alternatives.
Index mutual funds are among the better financial innovations to come along in the past few decades. These are specialized mutual… Read More
Learn everything you need to know in 'The ETF Investor's Handbook' FREE Special Report from The Successful Investor.
ETFs Guide for Canadian Investors: Find the best way to invest in ETFs with low fees, low risk & high satisfaction.
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