If you use mutual funds to build your clients’ wealth, look at the facts. In the 10 years ending August 31, 2002, the median large cap Canadian equity fund posted an annualized return of 7.1% versus 10.0% for the S&P/TSX 60 (backrun). U.S. large cap equity managers fared even worse, annualizing 8.9% against 13.3% for the S&P 500.

Active investment management doesn’t always deliver, and unfortunately you can’t know the funds that will until the race is over.

Because exchange traded equity funds track market indices, you know your clients will get market returns. Factor in their razor-thin MERs and their broad range of asset classes and ETFs become a powerful value-added tool in your portfolio-building arsenal.You can’t promise your clients out-performance, but you can at least be sure they keep pace with the market. And that’s a lot better than most mutual funds can deliver.

For more information on the active vs. passive management debate please visit the links below.

Sponsored by Barclays Global Investors Canada Limited
Contact Howard Atkinson at howard.atkinson@barclaysglobal.com

*Source: PALTrak, returns in Canadian dollars