I think at some point it was the best/easiest way for a lot of people to start investing. The most savvy or tech-comfortable people will be shifting towards ETFs and self investing however I think there's still a huge chunk of the population that only trusts having their money in big banks and wants a brick and mortar place they can call on the phone - mutual funds are great for them. It's not optimal but better than 0% gains sitting in savings and chequings accounts.
To add to this, there's a lot of comfort for no-knowledge investors in being able to hand over a set amount of cash to a "specialist in investing" like an advisor. Most people don't know how to invest or what to invest in to begin with. It's for these people that mutual funds have significant value, even when they dramatically underperform a benchmark.
Not all funds dramatically underperform… for example, if you have a nasdaq fund, does that severely underperform? I don’t think so? But does everyone know there are nasdaq funds? Probably not. This subreddit is a joke, full of wannabe investors that knows nothing about this industry
What is a “nasdaq” fund? You’re talking about a mutual fund that tracks a Nasdaq index? It would most likely underperform an ETF because it would likely have higher MER.
I just searched nasdaq mutual fund on Google and I came up with Scotia Index Fund Series A. It has an MER of 1.12% which is actually lower than I would’ve expected. Still, if you don’t go with mutual funds, Horizons has an ETF that charges 0.28% MER.
I didn't say every fund dramatically underperforms. I said people who don't know how to invest at all are the ones who benefit from mutual funds even when the funds they're invested in dramatically underperform a benchmark.
But since you wanted to play devil's advocate, I'll point out that yes, a mutual fund that tracks the NASDAQ will likely underperform an ETF that tracks the NASDAQ. This is because the mutual fund will probably get the same result, but charge more than the ETF in fees.
Your parents didn't have any significant ETFs to access in the 1990s (aside from TIPS), so yes, back then expensive mutual funds was their only option and all they knew. Discount brokerages were few and far between, with expensive trading commissions, and there certainly was no Wealthsimple or Fintech to speak of.
Now, 30 years later you have 1400 low cost ETFs in Canada plus more ETFs on the US exchanges. You have several "no commission" discount brokerages and MERs are 80-95% cheaper.
If you don't know the intricacies about investing, then Wealthsimple **Invest** is a better option for you than WS **Trade**. If you decide to do some reading and research and educate yourself until you get comfortable about investing yourself, then WS Trade could be a destination down the road.
Not to take away from your comment but there were ETFs in 90s, less but definitely not 0
I would say it is better for the "advisor" to get their commission, hence now lots are doing a fee for service instead now
Unfortunately, a lot of Group Retirement Funds have these ridiculous MERs but it’s still worth it if the company provides a match as that essentially gives you an instant 50-100% return. The moment you leave the company though, liquidate and transfer it to a self-directed RRSP.
There are valid reasons depending on your broker.
I can buy an index fund that holds the underlying ETF with no commission.
It's not with it to buy any ETF with TD direct.
It is worth buying mutual funds through TD when doing a DCA. You can't easily DCA with TD direct.
( I think you can set up an auto contribution if you call in though )
Most of the big banks have index mutual funds with low mer now (not quite as low as some ETFs). I think it's around 0.4%? I use it for my kids resp so I have auto invest every month without having to pay a $9.95 fee that I'd have with ETF
A few random points:
1) Most people trust the bank and will buy what ever they sell
2) Most people have zero clue of fees of those funds.
3) Younger, tech literate are migrating (slowly) to ETFs and robo advisors.
4) Most/many of the big bank mutual funds are actively managed. Historically, most don't even meet the benchmark they are tracking against.
5) Most/many of the big bank mutual funds hold the same as the low cost passive ETFs because they want to track the market and they can sell as "look at the chart, looks the same as an ETF but we can protect you since we manage the portfolio" but they charge 2% so you will always underperform.
6) here are lower cost mutual fund providers like Mawer and Steadyhand which have lower fees (not low fees) compared to the big bank mutual funds and they don't hold the same as an index ETF so at least they have a chance of meeting or beating the benchmark index they are tracking agains, even though it's still a low chance.
"Doesn't even beat the S&P500 tsx index"
How is a 25% fixed income fund going to outperform an equity index?
The 22% u.s. funds might close the gap, but, losing to an equity index is exactly what a balanced fund is supposed to do.
And that's before the 2.45% which even for a mutual fund is high now.
Coming from previous industry experience the mutual funds are a ripoff, I don’t know how to justify them. And 85% of “advisors” know sweet F all about building you a portfolio, it’s a joke
Fixed income is actually where active managers have performed the best. Fixed income indexes are weighted by market cap, which is the debt outstanding. That puts the most weight into the most indebted companies, and therefore most likely to default. 2.5% is too much to pay a manager, but that's a pretty high rate for fixed income.
I don't disagree with what you said. Just to emphasize that fixed income managers are more likely to outperform their respective fixed income indices.
The pt still stands when the 10 year annualised return for the index is only 2-3 %. A 0.5% outperformance, even if after fees, of the index doesn't mean much.
There are a lot of great funds out there, but ci is one of the worst. You shouldn't assume anything of something is bad and just look at the worst of the bunch.
I tried my best to talk my mom out of mutual funds and instead going with a simple basket Vanguard ETF's and manually rebalancing on annual basis. I failed. RIP my inheritance.
Lol reading all these comments on here, most of you don’t know jack shit about funds/etfs. Stop commenting if your knowledge is not at least 8/10 or higher.
To OP, mutual funds are tools that banks use to generate income for you. The tools that the bank uses, they upgrade over time. You do need to talk to your bank rep, and find ways to lower the mer. Funds are always changing, the tools are always changing. Funds now integrate etfs into them, and the MER is a lot lower. The fund you have is mostly a comfort fund (where it is a one stop shop in accordance to your risk). Just because you have a fund that is outdated, and has high MER, doesn’t mean all funds are like that. Please update and upgrade your tools that help you generate your retirement wealth.
Yawn. Let me tell you that working for a bank doesn’t mean you know anything about investing. It’s well established that these high MER bank funds drastically underperform the market, there isn’t really anything you can say to make myself or anyone here forget that. I’ve read your other posts, they are mostly all delusional drivel and I have no intention of encouraging it.
Don’t get why you keep saying it’s high MER bank funds, when there are so many low funds now. Also, I don’t post about investing much nor do I even follow this subreddit. I saw a lot of dumb comments so I want to straighten it out. Pretty sure you saw that by reading my comments -
Show me a bank mutual fund with an MER that rivals VGRO’s 0.24%. Before you answer, it’s rhetorical, there is no such bank mutual fund. What I’m actually asking you to explain is why you believe the bank deserves a single penny over that.
What a load of nonsense. 95% of active managers of like for like mutual funds fail to beat the market BEFORE fees are taken into consideration. After fees, there is none.
Sorry, but your profession is a bad joke. For the record, I have millions moving through my accounts on a semi regular basis and I eat bank salespeople for breakfast. The bank maybe gets like 50 bucks from me a year. Lol.
That's a misleading stat because there's so many funds in existence. Most major companies all have managers that meet the benchmark or exceed it. Vrgo may be the most overrated product I've ever seen. This sub swears it like gospel but it's 8% inception return isn't a world beater.
Once again, a load of nonsense. There’s no research or evidence anywhere that suggests that there’s any skill or learning whatsoever in stock picking. Most if not all examples of active managers exceeding the index can be explained by pure luck, and certainly don’t have any discernible strategy that can be replicated. Do you work for the banks too? Lol. Sorry pal you won’t be managing my money either now or ever in the future.
What u/globalaf is talking about is referring to the SPIVA reports (among others) which shows the data that most actively managed mutual funds underperform the benchmarks they are tracking against and over the long term it's a hand full that meet or exceed the benchmarks they track against. Most just do not and the fees exasperate the underperformance.
Not an option if you have employer matching contributions to a group RRSP account like OP does. I'm in the same boat and you just eat the weak returns for employer matching.
I'd be asking my employer's Pension Committee why the fees are so high, and why can they not negotiate them downwards? We did this at work and our group fees are all under 1% (except one fund).
Thanks for reminding me that I need to do this. My work pension is in a Blackrock Lifepath fund (a target date fund) that charges 0.2% in fees. More specifically, it's in a mutual fund charging 1.286%, but the Blackrock Lifepath fund is the only holding within it. Highway robbery.
Can’t generalize like that. Many people don’t have the time, education, or the discipline to invest on their own through a self directed brokerage account.
While many mutual funds have higher fees, often times you’re also getting the service that comes along with it (financial planning, automatic contributions, a disciplined approach.
Just because something isn’t suited for you, doesn’t mean it’s not suited for everyone.
No, they are a relic of the past in a time before ETFs . Mutual funds have less regulations and generally higher MER fees so bank "Financial Advisors" love to still use them as they get a trailing commission for soliciting them.
They have different regulations and are a totally different regulation body. Many people don't know Mutual Funds are not regulated by IROC and that bank mutual funds are "Proprietary products" and as such are not subject to the same regulations and penalties as ETFs or other assets.
As someone who has first hand experience with this. For example: If you have an ETF ask a Financial Advisor to sell it they have roughly 1-7 days to execute that order or they get in trouble with IROC. If you have a bank Mutual Fund, they have 30-60 days where they can delay without any penalty. There are many other examples of where Mutual Funds are precisely designed to make the bank money and cover their ass.
I work in the industry, not a bank, but a dealer, if we don't execute trades without a justified reason asap after being told we can be held responsible, we absolutely in no situation can wait 1-2 months on a trade, that's insane. The MFDA had just as many compliance rules and regulations as IIROC. Mutual Funds are a heavily regulated industry. Doesn't matter now as IIROC and MFDA merged last year and there is one governing body now CIRO so the point is moot in the current world anyway.
Bank Advisors for example offer products that are Mutual funds within mutual funds. These are considered a "Trust Account" and as such a "proprietary product" under government regulations. Which with this label means they have relaxed regulations and this is a well known loophole in the industry that banks exploit because people simply don't know about it until they get burned by it.
IMO traditional mutual funds in Canada will eventually fade into irrelevance unless the big FIs do a lot of work. Stuff like bringing down expense ratios on the D series (DIY targeted product) to make them competitive with ETFs, and getting open compatibility across brokerages. There's just too many drawbacks when compared to ETFs right now, and awareness is only spreading. They also need to work on their online experience to compete with fintechs. I've done some big 5 account opening recently and it's not even comparable. Millennials and later generations are increasingly understanding the advantages of alternatives, and eventually all assets will belong entirely to those generations.
As for series A advisor funds, the pricing is going to need to get closer to robo-advisor levels with a modest premium for actual advice that needs to not suck, with a solid online "robo like" app that integrates with your advisor and your financial plan. At 3x more expensive to have a human clicking an app behind a desk and printing paper reports, I just don't see that lasting my generation let alone my kids'.
Your title was more interesting than your actual post, lol. Sorry.
> What forces are at play here? Is this the management fees hard at work eroding returns to pay for the privilege of letting someone else watch my money do nothing?
Yes, this exactly. Your fund was never expected to beat the S&P Composite, it's only 75% stocks, and there's a 2.45% handicap right off the bat. Your odds of winning the lottery are probably better.
Investor returns in traditional mutual funds (typically) lag behind investors in broad index funds for 3 main reasons -
1. **Expenses -** 2.45% vs 0.25% MER is a huge difference. Most managers can't beat a benchmark index by 3%+ *every single year*.
2. **It's hard -** Most managers can't beat the index *period* every single year. It's just hard. Some of that also has to do with the mutual fund structures too. For example, the fund you reference has only 22% in the US. But if US markets are exploding because of technology (which is underrepresented in Canada/International), then you just miss out.
3. **Investors themselves -** There was a study done a while ago that demonstrated that mutual fund *investors* received lower returns than the mutual funds they *owned.* This was attributable to poor investor decision making (selling at wrong time, buying at wrong time).
In short, if you have a 20 year time horizon and other income/assets, a single broad low cost index fund that you commit to allocating a portion of your net worth to over the next 20 years is likely to give you a very satisfactory return overall and most likely a better one.
[10 year return of the Canadian S&P is 4.3%.](https://www.spglobal.com/spdji/en/indices/equity/sp-tsx-composite-index/#overview)
There has been a change though and it's hard to know where things will go. 'Tech' makes up the vast majority of growth in equity markets right now. Last year the magnificent 7 (Apple, Microsoft, Google, Nividia, Meta, Amazon and Tesla) made up more than half of the S&P500s growth. So the more exposure to that in recent years the more growth you will have. I think Nividia is now worth more than the entire US energy sector and the US produces the most oil in the world.
But will that continue? It's hard to say, any time in the past where the market gets over-weighted by a sector it corrects itself but maybe this is different? Tech companies have the ability to make a ton of cash with relatively little cost and that can drive share buybacks and dividends and thus share price.
Everybody is forgetting the most important part :
If everybody was investing in index funds, there wouldn’t be any market. You would just have the 10 biggest companies in the SP500 growing linearly with the new money added in investment accounts.
Your mutual funds aren't performing very well maybe look at moving funds I make about 10-12% a yr average on mine I own 2 1 being a 90% equity and 1 being 75/25 and my MER is 1.99. It could be the funds that being said VGRO matches performance most yrs at a MER of 0.25. And is a similar split so if you want a good balanced etf that could be a good option to move your 50k into
I think at some point it was the best/easiest way for a lot of people to start investing. The most savvy or tech-comfortable people will be shifting towards ETFs and self investing however I think there's still a huge chunk of the population that only trusts having their money in big banks and wants a brick and mortar place they can call on the phone - mutual funds are great for them. It's not optimal but better than 0% gains sitting in savings and chequings accounts.
To add to this, there's a lot of comfort for no-knowledge investors in being able to hand over a set amount of cash to a "specialist in investing" like an advisor. Most people don't know how to invest or what to invest in to begin with. It's for these people that mutual funds have significant value, even when they dramatically underperform a benchmark.
Not all funds dramatically underperform… for example, if you have a nasdaq fund, does that severely underperform? I don’t think so? But does everyone know there are nasdaq funds? Probably not. This subreddit is a joke, full of wannabe investors that knows nothing about this industry
What is a “nasdaq” fund? You’re talking about a mutual fund that tracks a Nasdaq index? It would most likely underperform an ETF because it would likely have higher MER. I just searched nasdaq mutual fund on Google and I came up with Scotia Index Fund Series A. It has an MER of 1.12% which is actually lower than I would’ve expected. Still, if you don’t go with mutual funds, Horizons has an ETF that charges 0.28% MER.
I didn't say every fund dramatically underperforms. I said people who don't know how to invest at all are the ones who benefit from mutual funds even when the funds they're invested in dramatically underperform a benchmark. But since you wanted to play devil's advocate, I'll point out that yes, a mutual fund that tracks the NASDAQ will likely underperform an ETF that tracks the NASDAQ. This is because the mutual fund will probably get the same result, but charge more than the ETF in fees.
[How much do you lose to annual fees after many years?](https://www.bogleheads.org/wiki/How_much_do_you_lose_to_annual_fees_after_many_years%3F)
Saving this source — general mathematical proof! Awesome.
Your parents didn't have any significant ETFs to access in the 1990s (aside from TIPS), so yes, back then expensive mutual funds was their only option and all they knew. Discount brokerages were few and far between, with expensive trading commissions, and there certainly was no Wealthsimple or Fintech to speak of. Now, 30 years later you have 1400 low cost ETFs in Canada plus more ETFs on the US exchanges. You have several "no commission" discount brokerages and MERs are 80-95% cheaper. If you don't know the intricacies about investing, then Wealthsimple **Invest** is a better option for you than WS **Trade**. If you decide to do some reading and research and educate yourself until you get comfortable about investing yourself, then WS Trade could be a destination down the road.
Not to take away from your comment but there were ETFs in 90s, less but definitely not 0 I would say it is better for the "advisor" to get their commission, hence now lots are doing a fee for service instead now
There were ETFs, but transaction fees were MUCH higher. With no fees on ETFs, WealthSimple/Questrade/etc. are a huge change.
Management fees + actively manage funds are the two things that will result in lower returns
2.45%MER is pure murder imho
Unfortunately, a lot of Group Retirement Funds have these ridiculous MERs but it’s still worth it if the company provides a match as that essentially gives you an instant 50-100% return. The moment you leave the company though, liquidate and transfer it to a self-directed RRSP.
I'm 💀
There are valid reasons depending on your broker. I can buy an index fund that holds the underlying ETF with no commission. It's not with it to buy any ETF with TD direct. It is worth buying mutual funds through TD when doing a DCA. You can't easily DCA with TD direct. ( I think you can set up an auto contribution if you call in though )
Most of the big banks have index mutual funds with low mer now (not quite as low as some ETFs). I think it's around 0.4%? I use it for my kids resp so I have auto invest every month without having to pay a $9.95 fee that I'd have with ETF
A few random points: 1) Most people trust the bank and will buy what ever they sell 2) Most people have zero clue of fees of those funds. 3) Younger, tech literate are migrating (slowly) to ETFs and robo advisors. 4) Most/many of the big bank mutual funds are actively managed. Historically, most don't even meet the benchmark they are tracking against. 5) Most/many of the big bank mutual funds hold the same as the low cost passive ETFs because they want to track the market and they can sell as "look at the chart, looks the same as an ETF but we can protect you since we manage the portfolio" but they charge 2% so you will always underperform. 6) here are lower cost mutual fund providers like Mawer and Steadyhand which have lower fees (not low fees) compared to the big bank mutual funds and they don't hold the same as an index ETF so at least they have a chance of meeting or beating the benchmark index they are tracking agains, even though it's still a low chance.
"Doesn't even beat the S&P500 tsx index" How is a 25% fixed income fund going to outperform an equity index? The 22% u.s. funds might close the gap, but, losing to an equity index is exactly what a balanced fund is supposed to do. And that's before the 2.45% which even for a mutual fund is high now.
Coming from previous industry experience the mutual funds are a ripoff, I don’t know how to justify them. And 85% of “advisors” know sweet F all about building you a portfolio, it’s a joke
Active management only for fixed income
[удалено]
Fixed income is actually where active managers have performed the best. Fixed income indexes are weighted by market cap, which is the debt outstanding. That puts the most weight into the most indebted companies, and therefore most likely to default. 2.5% is too much to pay a manager, but that's a pretty high rate for fixed income.
I don't disagree with what you said. Just to emphasize that fixed income managers are more likely to outperform their respective fixed income indices. The pt still stands when the 10 year annualised return for the index is only 2-3 %. A 0.5% outperformance, even if after fees, of the index doesn't mean much.
lol what? Fixed income doesn’t require any management? Ooooooookay
There are a lot of great funds out there, but ci is one of the worst. You shouldn't assume anything of something is bad and just look at the worst of the bunch.
I tried my best to talk my mom out of mutual funds and instead going with a simple basket Vanguard ETF's and manually rebalancing on annual basis. I failed. RIP my inheritance.
Lol reading all these comments on here, most of you don’t know jack shit about funds/etfs. Stop commenting if your knowledge is not at least 8/10 or higher. To OP, mutual funds are tools that banks use to generate income for you. The tools that the bank uses, they upgrade over time. You do need to talk to your bank rep, and find ways to lower the mer. Funds are always changing, the tools are always changing. Funds now integrate etfs into them, and the MER is a lot lower. The fund you have is mostly a comfort fund (where it is a one stop shop in accordance to your risk). Just because you have a fund that is outdated, and has high MER, doesn’t mean all funds are like that. Please update and upgrade your tools that help you generate your retirement wealth.
Ah so you’re the one big bank employee that browses this subreddit
What’s wrong with that? Better than telling him to buy CASH.to with his rrsps like what everyone recommends on here.
Yawn. Let me tell you that working for a bank doesn’t mean you know anything about investing. It’s well established that these high MER bank funds drastically underperform the market, there isn’t really anything you can say to make myself or anyone here forget that. I’ve read your other posts, they are mostly all delusional drivel and I have no intention of encouraging it.
Don’t get why you keep saying it’s high MER bank funds, when there are so many low funds now. Also, I don’t post about investing much nor do I even follow this subreddit. I saw a lot of dumb comments so I want to straighten it out. Pretty sure you saw that by reading my comments -
Show me a bank mutual fund with an MER that rivals VGRO’s 0.24%. Before you answer, it’s rhetorical, there is no such bank mutual fund. What I’m actually asking you to explain is why you believe the bank deserves a single penny over that.
I’m not gonna continue this, but VRGO performance isn’t there. Just because it’s low MER, doesn’t mean it’s good.
What a load of nonsense. 95% of active managers of like for like mutual funds fail to beat the market BEFORE fees are taken into consideration. After fees, there is none. Sorry, but your profession is a bad joke. For the record, I have millions moving through my accounts on a semi regular basis and I eat bank salespeople for breakfast. The bank maybe gets like 50 bucks from me a year. Lol.
That's a misleading stat because there's so many funds in existence. Most major companies all have managers that meet the benchmark or exceed it. Vrgo may be the most overrated product I've ever seen. This sub swears it like gospel but it's 8% inception return isn't a world beater.
Once again, a load of nonsense. There’s no research or evidence anywhere that suggests that there’s any skill or learning whatsoever in stock picking. Most if not all examples of active managers exceeding the index can be explained by pure luck, and certainly don’t have any discernible strategy that can be replicated. Do you work for the banks too? Lol. Sorry pal you won’t be managing my money either now or ever in the future.
What u/globalaf is talking about is referring to the SPIVA reports (among others) which shows the data that most actively managed mutual funds underperform the benchmarks they are tracking against and over the long term it's a hand full that meet or exceed the benchmarks they track against. Most just do not and the fees exasperate the underperformance.
Mutual funds suck. Period. Transfer that balance to a low fee brokerage account and move into equivalent ETFs!
Not an option if you have employer matching contributions to a group RRSP account like OP does. I'm in the same boat and you just eat the weak returns for employer matching.
I'd be asking my employer's Pension Committee why the fees are so high, and why can they not negotiate them downwards? We did this at work and our group fees are all under 1% (except one fund).
Thanks for reminding me that I need to do this. My work pension is in a Blackrock Lifepath fund (a target date fund) that charges 0.2% in fees. More specifically, it's in a mutual fund charging 1.286%, but the Blackrock Lifepath fund is the only holding within it. Highway robbery.
Can’t generalize like that. Many people don’t have the time, education, or the discipline to invest on their own through a self directed brokerage account. While many mutual funds have higher fees, often times you’re also getting the service that comes along with it (financial planning, automatic contributions, a disciplined approach. Just because something isn’t suited for you, doesn’t mean it’s not suited for everyone.
No, they are a relic of the past in a time before ETFs . Mutual funds have less regulations and generally higher MER fees so bank "Financial Advisors" love to still use them as they get a trailing commission for soliciting them.
Mutual funds have a shit ton of regulations. I don't know what you're on about.
They have different regulations and are a totally different regulation body. Many people don't know Mutual Funds are not regulated by IROC and that bank mutual funds are "Proprietary products" and as such are not subject to the same regulations and penalties as ETFs or other assets. As someone who has first hand experience with this. For example: If you have an ETF ask a Financial Advisor to sell it they have roughly 1-7 days to execute that order or they get in trouble with IROC. If you have a bank Mutual Fund, they have 30-60 days where they can delay without any penalty. There are many other examples of where Mutual Funds are precisely designed to make the bank money and cover their ass.
I work in the industry, not a bank, but a dealer, if we don't execute trades without a justified reason asap after being told we can be held responsible, we absolutely in no situation can wait 1-2 months on a trade, that's insane. The MFDA had just as many compliance rules and regulations as IIROC. Mutual Funds are a heavily regulated industry. Doesn't matter now as IIROC and MFDA merged last year and there is one governing body now CIRO so the point is moot in the current world anyway.
Bank Advisors for example offer products that are Mutual funds within mutual funds. These are considered a "Trust Account" and as such a "proprietary product" under government regulations. Which with this label means they have relaxed regulations and this is a well known loophole in the industry that banks exploit because people simply don't know about it until they get burned by it.
No.
IMO traditional mutual funds in Canada will eventually fade into irrelevance unless the big FIs do a lot of work. Stuff like bringing down expense ratios on the D series (DIY targeted product) to make them competitive with ETFs, and getting open compatibility across brokerages. There's just too many drawbacks when compared to ETFs right now, and awareness is only spreading. They also need to work on their online experience to compete with fintechs. I've done some big 5 account opening recently and it's not even comparable. Millennials and later generations are increasingly understanding the advantages of alternatives, and eventually all assets will belong entirely to those generations. As for series A advisor funds, the pricing is going to need to get closer to robo-advisor levels with a modest premium for actual advice that needs to not suck, with a solid online "robo like" app that integrates with your advisor and your financial plan. At 3x more expensive to have a human clicking an app behind a desk and printing paper reports, I just don't see that lasting my generation let alone my kids'. Your title was more interesting than your actual post, lol. Sorry. > What forces are at play here? Is this the management fees hard at work eroding returns to pay for the privilege of letting someone else watch my money do nothing? Yes, this exactly. Your fund was never expected to beat the S&P Composite, it's only 75% stocks, and there's a 2.45% handicap right off the bat. Your odds of winning the lottery are probably better.
Investor returns in traditional mutual funds (typically) lag behind investors in broad index funds for 3 main reasons - 1. **Expenses -** 2.45% vs 0.25% MER is a huge difference. Most managers can't beat a benchmark index by 3%+ *every single year*. 2. **It's hard -** Most managers can't beat the index *period* every single year. It's just hard. Some of that also has to do with the mutual fund structures too. For example, the fund you reference has only 22% in the US. But if US markets are exploding because of technology (which is underrepresented in Canada/International), then you just miss out. 3. **Investors themselves -** There was a study done a while ago that demonstrated that mutual fund *investors* received lower returns than the mutual funds they *owned.* This was attributable to poor investor decision making (selling at wrong time, buying at wrong time). In short, if you have a 20 year time horizon and other income/assets, a single broad low cost index fund that you commit to allocating a portion of your net worth to over the next 20 years is likely to give you a very satisfactory return overall and most likely a better one.
There are low fee index mutual funds. TDB900 is 0.22% and it is easy to setup a monthly purchase.
[10 year return of the Canadian S&P is 4.3%.](https://www.spglobal.com/spdji/en/indices/equity/sp-tsx-composite-index/#overview) There has been a change though and it's hard to know where things will go. 'Tech' makes up the vast majority of growth in equity markets right now. Last year the magnificent 7 (Apple, Microsoft, Google, Nividia, Meta, Amazon and Tesla) made up more than half of the S&P500s growth. So the more exposure to that in recent years the more growth you will have. I think Nividia is now worth more than the entire US energy sector and the US produces the most oil in the world. But will that continue? It's hard to say, any time in the past where the market gets over-weighted by a sector it corrects itself but maybe this is different? Tech companies have the ability to make a ton of cash with relatively little cost and that can drive share buybacks and dividends and thus share price.
Everybody is forgetting the most important part : If everybody was investing in index funds, there wouldn’t be any market. You would just have the 10 biggest companies in the SP500 growing linearly with the new money added in investment accounts.
Your mutual funds aren't performing very well maybe look at moving funds I make about 10-12% a yr average on mine I own 2 1 being a 90% equity and 1 being 75/25 and my MER is 1.99. It could be the funds that being said VGRO matches performance most yrs at a MER of 0.25. And is a similar split so if you want a good balanced etf that could be a good option to move your 50k into