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Mutual Fund News

ME AND MY MONEY

Special to The Globe and Mail

ANTHONY RAGE, 51

Occupation

Pharmacist

The portfolio

Low-cost mutual funds

The investor

In high school, Anthony Rage bought some silver certificates.

They soared in value, and then collapsed. Later, as a pharmacist, he invested with a stock broker.

But returns failed to keep up with costs - a 1-per-cent annual fee levied on a portfolio of mutual funds that charged management fees of as much as 3 per cent. So he switched to investing on his own through an online brokerage account. However, it became time-consuming and returns were unsatisfactory.

How he invests

Finally, in 2010, Mr. Rage "moved his accounts" to Steadyhand Investment Funds Inc., a family of low-cost mutual funds. The cost on his funds is 0.91 per cent a year, thanks largely to Steadyhand's practice of selling directly to investors instead of through commissioned advisers.

His annual compound rate of return is reported at 12.6 per cent. "But past performance has little to do with future performance," he cautions.

Steadyhand funds use concentrated, low-turnover portfolios, which "I believe gives me a better chance at doing better than the broad market," Mr. Rage says. "I'd rather hold only best-in-class companies than a basket of them, like an ETF does." He also takes comfort in knowing that key personnel at Steadyhand have "most of their own personal investments in the funds."

His biggest position (nearly 50 per cent of his assets) is in the Founders Fund, which holds Steadyhand's equity and fixed-income funds. The long-term asset allocation is 60-per-cent equities and 40-per-cent fixed income (and cash). However, the manager may choose a lower equity allocation whenever the stock market's valuation is high (and vice versa, if market's valuation is low).

Best move

"Never paying interest on anything other than student loans and mortgages."

Worse move

"Thinking I could do it myself with an online brokerage account."

Advice

His advice is to take advantage of registered education savings plans, tax-free savings accounts and registered retirement savings plans.

Want to share your strategies? E-mail mccolumn@yahoo.com

© 2007 The Globe and Mail. All rights reserved.

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