tag:blogger.com,1999:blog-5465015914589377788.post8091404102166632841..comments2024-03-20T09:32:16.592-04:00Comments on Michael James on Money: Mutual Fund Costs not in the SpotlightMichael Jameshttp://www.blogger.com/profile/10362529610470788243noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-5465015914589377788.post-9776124578438587692020-11-09T21:27:43.463-05:002020-11-09T21:27:43.463-05:00The following exchange is reproduced to remove bro...The following exchange is reproduced to remove broken links.<br /><br />----- BHCh January 18, 2020 at 9:05 AM<br /><br />Yes, most Canadian mutual funds from the likes of RBC and their salesmen (who are euphemistically called “advisors”) are atrocious.<br /><br />Steadyhand, Mawer, Tangerine, Beautel Goodman are better.<br /><br />----- Michael James January 18, 2020 at 9:21 AM<br /><br /> BHCh: Yes, I was looking at an RBC Canadian equity fund. It never beat its index once in the past 10 years. Nearly always trailed by roughly its MER. Rent-seeking.<br /><br />---- BHCh January 18, 2020 at 10:18 AM<br /><br /> Yes, I had a “conversation” with an RBC saleswoman about 5 years ago. She told me 2% MER was low. And that the fund she was pushing was guaranteed to outperform because the manager was so clever. It was atrocious.<br /><br />----- BHCh January 18, 2020 at 10:20 AM<br /><br />Oh, and she told me that by refusing to buy the fund I was “forfeiting her valuable and free advice”.<br /><br />----- Michael James January 18, 2020 at 1:23 PM<br /><br /> BHCh: That definition of "free" reminds me of a story from my father. When he and my mother bought a house for $11,500, they were told that if they paid $15,000, they'd get a free car with it.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-24788338255951472882020-01-21T17:12:20.695-05:002020-01-21T17:12:20.695-05:00@Tom: Thanks for your insight. I'm hopeful t...@Tom: Thanks for your insight. I'm hopeful that closet indexers are becoming less of a problem. Sadly, it's some of the biggest mutual funds that continue to charge active fees but hug the index. Looking past high-cost closet indexing, I agree that the high cost of "advice" is a major concern. I'd like to think that the current focus on advice costs will make a positive difference. I'm also hopeful that if we get advice costs under control, this will help take care of unreasonably expensive mutual funds. I'm not holding my breath though.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-67889460044800336302020-01-21T16:50:37.468-05:002020-01-21T16:50:37.468-05:00Tom Bradley at Steadyhand sent me the following co...Tom Bradley at Steadyhand sent me the following comment:<br /><br />Michael, with regard to your recent blog … it's important to keep the advice and fund management costs separate. I agree that there's way too much 'closet indexing' and that the total fee for most investors is too high, but the product cost is a small part of the problem. 'F' series fund fees are coming down and are quite competitive with the specialty ETF MERs. <br /><br />Today, if an investor wants advice, whether they use ETFs, mutual funds or individual securities, they are paying a king's ransom (for advice). An ETF investor who uses an advisor may also be close to 2% all in.<br /><br />Yes, some 'active' funds are frauds, but the real culprit here is the cost of advice. <br /><br />Keep well,<br /><br />TBMichael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.com