What we're looking at
Thursday's theme of Canadian equity mutual funds that beat exchange-traded funds is extended here into the international equity category.
We started with Globeinvestor.com's database of 56 international equity funds with a track record going back at least 10 years, including both mutual funds and ETFs but excluding segregated funds and U.S.-dollar funds. We then screened for the top performers over the decade to Sept. 30, and ranked them from best to worst. Note: International funds cover the world outside North America. Partner one with a U.S. equity fund to round out the global exposure in your portfolio.
What we found
Let's just say you've got plenty of choice if you're a mutual fund investor seeking comparable performance to index-tracking ETFs. There's just one ETF in the international equity category with a 10-year record, the iShares MSCI EAFE Index Fund (XIN), and to call its 10-year results undistinguished would be an understatement. All kinds of mutual funds beat it over the past decade - index funds, actively managed fund, funds that used currency hedging and funds that didn't.
XIN itself hedges its exposure to foreign currencies so that investors get the return of its underlying stocks without distortions caused by fluctuations in the value of our dollar. But you have to wonder how effective the hedging is in this case. Check out RBC International Index Currency Neutral, a hedged fund that at least stayed marginally in the black over the past 10 years. XIN lost money over that period.
MUTUAL FUNDS THAT BEAT ETFS: THE INTERNATIONAL EQUITY FUND CATEGORY
|Returns to Sept. 30 (%)|
|Fund||Assets ($ mil.)||MER (%)||1 Year||3 Year||5 Year||10 year|
|GBC International Growth||93.2||1.95||-4.24||4.89||-1.71||4.92|
|Mawer World Investment||290.9||1.49||-6.9||1.35||-1.19||4.07|
|Invesco International Growth Class||99.5||2.64||-5.06||0.79||-2.84||2.55|
|Acadian Core International Equity||160.6||1.33||-4.16||-2.73||-6.65||2.07|
|Renaissance International Equity||62.4||2.8||-6.86||-0.32||-0.47||1.85|
|Integra International Equity||44.1||1.31||-7.2||-3.26||-4.32||1.26|
|Mackenzie Focus International Class||16.4||2.76||-14.75||-1.82||-5.02||1.18|
|CI International Value||58.3||2.45||-4.16||0.43||-4.5||0.76|
|TD International Index-e||n/a||0.5||-8.6||-2.75||-5.11||0.37|
|RBC Intl Index Currency Neutral||190.6||0.69||-11.42||-5||-7||0.17|
|Trimark International Companies-A||50.9||2.89||-12.13||-3.38||-7.82||-0.04|
|CIBC International Index||142.1||1.17||-9.14||-3.44||-5.62||-0.1|
|Altamira Int'l Currency Neutral Idx||82.5||0.65||-12.98||-6.88||-7.94||-0.21|
|McLean Budden International Equ D||36.2||1.25||-9.36||-1.44||-4.62||-0.22|
|Mackenzie Univ International Stock||437.8||2.54||-14.55||-2.96||-3.61||-0.31|
|Desjardins Overseas Equity Value||687.3||2.58||-5.64||-4.51||-8.14||-0.46|
|Tmpltn International Stock||624.2||2.73||-10.84||-2.38||-4.65||-0.48|
|BMO International Equity ETF||40.2||1.11||-12.82||-6.53||-8.04||-0.52|
|Scotia International Index||19.5||1.18||-8.71||-3.35||-5.9||-0.6|
|AGF International Stock Class||378.7||3.07||-19.22||-9.13||-9.44||-0.66|
|Renaissance International Dividend||7.6||2.36||-11.23||-5.48||-6.41||-0.66|
|Standard Life Int'l Equity-A||50.9||2.42||-10.95||-3.73||-5||-0.69|
|Beutel Goodman Int'l Equity-D||67.3||1.49||-9.08||-4.48||-7.01||-0.76|
|PH&N Overseas Equity-D||245.2||1.35||-14.95||0.73||-5.33||-0.95|
|iSHARES MSCI EAFE INDEX (CAD-HEDGED)||821.5||0.15||-12.43||-6.52||-7.91||-1.09|
|International equity fund category average||2.5||-11.2||-3.1||-6.5||-0.4|
|Note: ETF shown in capital letters. Source: Globeinvestor.com|
© 2007 The Globe and Mail. All rights reserved.
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