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:
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If you want to invest in index funds, we think you should stick with exchange-traded funds (ETFs) like those we recommend as buys.
ETFs are like open-ended index funds in that they trade at net asset value. But ETFs trade on stock exchanges, just like stocks.
You’ll… Read More
ISHARES CDN LARGECAP 60 INDEX FUND $12.71 (Toronto symbol XIU; buy or sell through a broker) (units split 4-for-1 in August, 2008) is a good low-fee way to buy the top stocks on the TSX. The units hold a basket of stocks that represent the… Read More
We still think high-quality mutual funds with a long-term focus will beat indexes over long periods. If funds invest as we advise — sticking with well-established companies and spreading their assets out across the five main economic sectors — they will tend to lose a.. Read More
ISHARES CDN LARGECAP 60 INDEX FUND $83.94 (Toronto symbol XIU; buy or sell through a broker) (formerly called iUnits S&P/TSX 60 Index Participation Fund) is a good low-fee way to buy the top stocks on the TSX. The units hold a basket of stocks that… Read More
We still think high-quality mutual funds with a long-term focus will beat indexes over long periods. If funds invest as we advise — sticking with well-established companies and spreading their assets out across the five main economic sectors — they will tend to lose a.. Read More
ISHARES MCSI CANADA INDEX FUND $30 (American Exchange symbol EWC; buy or sell through brokers) invests in most of the stocks in the Morgan Stanley Capital International Canada Index. These stocks represent Canada’s largest and most-established public companies, accounting for about 60% of the market… Read More
ISHARES CDN LARGECAP 60 INDEX FUND $76.65 (Toronto symbol XIU; buy or sell through a broker) (formerly called iUnits S&P/TSX 60 Index Participation Fund) is a good low-fee way to buy the top stocks on the TSX. The units hold a basket of stocks that… Read More
We think high-quality mutual funds with a long term focus will beat indexes over long periods. If funds invest as we advise — sticking with well established companies and spreading their assets out across the five main economic sectors — they will tend to lose… Read More
ISHARES MCSI CANADA INDEX FUND $30 (American Exchange symbol EWC; buy or sell through brokers) invests in most of the stocks in the Morgan Stanley Capital International Canada Index. These stocks represent Canada’s largest and most-established public companies, accounting for about 60% of the market… Read More
ISHARES CDN LARGECAP 60 INDEX FUND $79.86 (Toronto symbol XIU; buy or sell through a broker) (formerly called iUnits S&P/TSX 60 Index Participation Fund) is a good low-fee way to buy the top stocks on the TSX. The units hold a basket of stocks that… Read More
Learn everything you need to know in 'The Canadian Guide on How to Invest in Stocks Successfully' FREE Special Report from The Successful Investor.
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What personal information do we collect?
The information we receive from customers helps us personalize and continually improve your online experience at TSI Network. TSI Network may collect personal information online for all legal purposes, which include, but are not limited to:
Information You Give Us: We receive and store any information you enter on our website or give us in any other way through sign-up forms or ordering forms for publications and services. You can choose not to provide certain information, but then you might not be able to take advantage of many of our services and features. We use the information that you provide for such purposes as responding to your requests, customizing your web browsing experience for you, improving our website, and communicating with you.
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We do reserve the right, however, to collect and perform statistical analyses of the internet traffic to our website for our internal use. However, information collected does not allow us to identify any individual, and will not collect any personal information of the visitor. Furthermore, we do not sell, rent or loan to any outside parties the information collected and analyzed.
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Does TSI Network Use the Information It Receives?
"Contact Us" and Comment Features: TSI Network encourages visitors to its websites to contact us with questions and comments. Email addresses and other information of persons using these features may be collected in order to facilitate our responses to those inquiries.
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We may disclose personal information you have provided through our websites, for the above purposes, to persons or companies that we retain to carry out and other activities for which you have registered or in which you have otherwise asked to participate. In particular, we may for these purposes transfer information to any country (including the USA and other countries which may not offer the same level of data protection as Canada). We also will disclose personal information if required by law, including compliance with warrants, subpoenas or other legal processes.
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Changes to this Policy
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TSI Network may revise this Policy from time to time.
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