Timing the market can cause big losses
Low-fee funds generate the best time-weighted returns
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Low-fee funds generate the best time-weighted returns
Bad Fund Timing versus Fund Fees (1991 – 2013) | |||
Expense Ratio | Dollar-Weighted Return | Time-Weighted Return | Difference |
Lowest | 7.88% | 9.22% | -1.34% |
Low | 6.93% | 8.85% | -1.92% |
Average | 6.07% | 8.35% | -2.28% |
High | 4.80% | 7.84% | -3.03% |
Highest | 2.87% | 6.88% | -4.01% |
Source: Table 3 from “Timing Poorly” by Jason Hsu, et al. |
Name | Price | P/B | P/E | Earnings Yield | Dividend Yield |
Potash (POT) | $37.56 | 2.77 | 17.56 | 5.70% | 4.96% |
BCE (BCE) | $54.37 | 4.16 | 19.28 | 5.19% | 4.78% |
CIBC (CM) | $93.45 | 1.98 | 10.64 | 9.40% | 4.67% |
Rogers (RCI.B) | $42.28 | 4.00 | 16.84 | 5.94% | 4.54% |
Shaw (SJR.B) | $26.89 | 2.66 | 16.10 | 6.21% | 4.41% |
Bank of Montreal (BMO) | $74.79 | 1.45 | 12.04 | 8.30% | 4.39% |
National Bank (NA) | $48.58 | 1.80 | 10.82 | 9.24% | 4.28% |
Bank of Nova Scotia (BNS) | $66.08 | 1.71 | 11.49 | 8.70% | 4.12% |
TransCanada (TRP) | $50.72 | 2.12 | 20.87 | 4.79% | 4.10% |
TELUS (T) | $41.56 | 3.28 | 17.39 | 5.75% | 4.04% |
Source: Bloomberg, June 9, 2015 |
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