Back in the fall I highlighted the potential for Canadian stocks to spring forward versus U.S. stocks. Their multi-year underperformance had left investors cold along with U.S. value, U.S. small cap, international, and emerging market stocks. While small cap stocks and value stocks subsequently dodged the winter blues with strong relative returns, the others stayed in hibernation. Will these others join small cap and value stocks and spring forward?
Category: Portfolio Analysis
ECG On ESG Performance
Following up on my blog last month on Sustainable Investing, I have monitored the health of ESG by performing an investment ECG. I replaced electrodes with data by monitoring the returns over the last five years for ESG and regular equity indices. A review of the performance graphs shows a clear pattern of ESG outperformance. But like most diagnoses, identifying the underlying causes is complex.
Sustainable Investing: The ABCs of ESG
Sustainable Investing (SI) is the general term used for considering the environmental, social, and governance (ESG)[1] impact of investing in the securities and assets of governments and corporations. Responsible investing, social investing, or values-based investing are other terms that are often used. Similar to traditional investing, it can be hard to filter SI information to separate the hype from the helpful.
Fair Fee Fare
There is a menu of choices out there for your fee fare. Paying a fair fee for advice and investments is one of the most important aspects of your wealth strategy. It is also part of what inspired me to build my consulting business and name it “Wayfairer”, as I have come across too many people that don’t get fair value for the fees they pay. Fairness is not always about paying the lowest fee. It is about getting valuable advice and services. It is about getting outperformance versus passive investments like low-cost ETFs if you are paying for active management.
Portfolio Pie
I like to think about the asset allocation of a portfolio as different pieces of a pie. You can choose from various ingredients to create a portfolio pie that best satisfies your needs. The asset mix of most Canadians’ portfolio pie contains a big piece of Canadian stocks and bonds. However, there is a much bigger pie to choose from, where Canada represents only a small slice. It helps to know what the size of the global investable pie is, and how it is divided up, before sitting down to take a bite of what is on offer.
Active Management: Drive Carefully
In my previous blog you saw that only one out of three actively managed balanced funds outperformed a low-cost ETF portfolio after fees. But does this mean that all the actively managed components of a balanced fund performed poorly? By examining the various asset classes and sectors you can see where you can keep driving ahead with active management, where you need to exercise extreme caution, and where you should slam on the brakes. Once again, I am looking from the perspective of investments in a RRSP or RRIF. The results improve for taxable accounts if your investment management fees […]
A Balanced Perspective On Balanced Funds
While Meatloaf sang “Now don’t be sad, ‘cause two Out Of Three Ain’t Bad” on the “Bat Out of Hell” album, looking at the performance of balanced fund managers will have you singing from a different song sheet. What ain’t bad is that over the last ten years about two out of three actively managed balanced funds outperformed the benchmark index. What is bad is that when you factor in their fees outperforming funds drop to one out of three, and worse for shorter time periods, if held in a RRSP or RRIF.