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Mutual Fund News


Special to The Globe and Mail



Editor, Canadian Investment Review

The portfolio

Mainly exchange-traded funds (ETFs) and index funds

The investor

Caroline Cakebread edits the Canadian Investment Review, a publication for institutional investors. She also writes on money issues for Chatelaine Magazine and runs a consulting company that provides services to financial institutions. As if that was not enough, she just co-authored a book on the assetbacked commercial-paper crisis of 2007 and 2008.

How she invests

An investment editor for more than a dozen years, Ms. Cakebread has become quite familiar with how Canadian pension plans invest. A main takeaway for her is that it is important to pay attention to costs, diversification and risk. "I am all about keeping costs low ... and keeping my eye on achieving a steady - not an out-of-the-park - return, year after year," she says.

For her long-term goal of building a retirement fund, ETFs and index funds fit the bill. Consider the TD e-Series Funds, the index funds she started out with. Diversified exposure to the market is provided at a rock-bottom cost, without commissions for buying or selling units and at among the lowest annual managementexpense ratios within the Canadian mutual-fund universe.

A portfolio move last fall was to reduce exposure to Canadian equities in favour of U.S. equities (this worked out well, she observes). Ms. Cakebread is now looking to add an ETF that improves the diversification of her fixed-income allocation (which currently includes the iShares Canadian Real Return Bond and Vanguard Canadian Aggregate Bond ETFs).

Best move

"Opening an online brokerage account and taking up the reins of my portfolio."

Worst move

"When I first started saving, I let an adviser put me into mutual funds with deferred sales charges. It turned out to be a forced buy-and-hold strategy that wasn't right for me."


"All investors should understand the fees they are paying and ... what impact they could have on their investment returns over time. Even the biggest investors in Canada now understand that ... keeping costs low is of paramount importance."

Want to share your strategies? E-mail

© 2007 The Globe and Mail. All rights reserved.

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