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Old 12-30-2016, 07:15 PM   #12
Slava
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Join Date: Dec 2006
Location: Calgary, Alberta
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Quote:
Originally Posted by heep223 View Post
Anybody who is paying a PM 100bps+ to try and pick stocks to beat a market index, in developed markets of stocks and bonds, is ignoring a lot of research and data. Even worse than that is paying a stockbroker to manage your portfolio, who doesn't have a fiduciary duty to put your interests before his own interests. There is one US Equity mutual fund in Canada that has beat the S&P 500 over the past 5 years. One. This is only the beginning as well, as markets continue to get more and more efficient.

You can buy the US stock market for 3 basis points.
Well the fact is that no one is paying that kind of money and not getting other services as well. Unfortunately the people paying those kinds of fees and getting nothing with it are using discount brokers on their own and buying mutual funds.

The other point is that its not all about market efficiency either. It also has a lot to do with the risk adjusted return.

Quote:
Originally Posted by pseudoreality View Post
You can debate whether rebalancing an ETF portfolio is active or not, but the fact remains that no one has a good argument on why a person should pay a fund manager huge, often hidden, fees to fail at trying to beat the market.
I don't think that rebalancing an ETF is active though. I just think that the choices as well as the asset allocation is much more of an active choice than what some would have you believe. Rebalancing is just that, and that isn't active.

And as an aside, those fees are far from hidden. There are some remaining with certain products (segregated funds, closed end mandates and things like that), but mutual fund fees are completely disclosed.

I should also add that those fees aren't in place specifically to beat the market. I don't even know which market you would be trying to beat?
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