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Mutual Fund News

International funds vs. ETFs: No contest

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.

Our screen

We started with'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.



Returns to Sept. 30 (%)
FundAssets ($ mil.)MER (%)1 Year3 Year5 Year10 year
GBC International Growth93.21.95 -4.244.89-1.714.92
Mawer World Investment290.91.49-6.91.35-1.194.07
Invesco International Growth Class99.52.64-5.060.79-2.842.55
Acadian Core International Equity160.61.33-4.16-2.73-6.652.07
Renaissance International Equity62.42.8-6.86-0.32-0.471.85
Integra International Equity44.11.31-7.2-3.26-4.321.26
Mackenzie Focus International Class16.42.76-14.75-1.82-5.021.18
CI International Value58.32.45-4.160.43-4.50.76
TD International Index-en/a0.5-8.6-2.75-5.110.37
RBC Intl Index Currency Neutral190.60.69-11.42-5-70.17
Trimark International Companies-A50.92.89-12.13-3.38-7.82-0.04
CIBC International Index142.11.17-9.14-3.44-5.62-0.1
Altamira Int'l Currency Neutral Idx82.50.65-12.98-6.88-7.94-0.21
McLean Budden International Equ D36.21.25-9.36-1.44-4.62-0.22
Mackenzie Univ International Stock437.82.54-14.55-2.96-3.61-0.31
Desjardins Overseas Equity Value687.32.58-5.64-4.51-8.14-0.46
Tmpltn International Stock624.22.73-10.84-2.38-4.65-0.48
BMO International Equity ETF40.21.11-12.82-6.53-8.04-0.52
Scotia International Index19.51.18-8.71-3.35-5.9-0.6
AGF International Stock Class378.73.07-19.22-9.13-9.44-0.66
Renaissance International Dividend7.62.36-11.23-5.48-6.41-0.66
Standard Life Int'l Equity-A50.92.42-10.95-3.73-5-0.69
Beutel Goodman Int'l Equity-D67.31.49-9.08-4.48-7.01-0.76
CI International34.32.47-7.87-4.22-7.64-0.95
PH&N Overseas Equity-D245.21.35-14.950.73-5.33-0.95
iSHARES MSCI EAFE INDEX (CAD-HEDGED)821.50.15-12.43-6.52-7.91-1.09
International equity fund category average2.5-11.2-3.1-6.5-0.4
Note: ETF shown in capital letters. Source:

© 2007 The Globe and Mail. All rights reserved.

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