Invesco Canada blog

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Invesco Canada | November 7, 2014

How do Trimark’s mutual funds (really) stack up?

The Globe and Mail published a column (October 29, 2014) examining the performance of Trimark mutual funds. As unabashed active managers, we don’t shy away from this kind of analysis; we welcome the affirmation of the Trimark discipline.

“Many of Trimark’s fund managers have done a stellar job,” he writes. “In fact, when looking at Trimark’s funds with 10-year returns, more than half of their managers beat their index benchmarks.”

While the columnist, an avid critic of active management, recognized our strong performance, he went headlong into a critique of management fees, using a few select Trimark funds as examples. The active vs. passive debate is nothing new in the investing world and we are happy to engage on this topic.

We do, however, take issue with the columnist’s methodology in this case.

It is misleading to compare a Series A mutual fund with an ETF because advisor compensation for the ETF is not accounted for. Clearly advisors deserve to be paid for their work, as studies have shown that investors who work with an advisor are financially better off than those who invest alone.1

If the goal is to compare product performance, a more accurate assessment would compare ETF returns with those of Series F mutual funds. For illustrative purposes, we’ll demonstrate using two of the same funds and the same 10-year time period the columnist used.

After fees, Trimark Canadian Opportunity Class, Series A earned 7.46%, compared with 8.48% earned by iShares Core S&P/TSX 60 Capped Composite Index (XIC), which does not include any of the fees associated with advice or transactions. Look instead at the Series F mutual fund, and Trimark beats the ETF with a return of 8.57%.

The same goes for Trimark U.S. Companies Fund. The Series A fund earned 5.47% after fees, compared with the iShares Core S&P 500 Index ETF (XSP) at 5.82%, again without accounting for fees. Look at the Series F version of the same fund, and Trimark beats the ETF again, with 7.11%.

We provide these examples only to point out the flaws in the columnist’s methodology, not to say these are precise apples to apples comparisons either. But at least we’re all walking in an orchard now.

There are costs associated with all investment products and our fees are clearly stated for each fund. We were pleased to see that readers commenting on The Globe and Mail website are aware of the mismatched comparisons provided in the column.

As a team, we believe the Trimark discipline stands up well to analysis and we are very comfortable discussing how our time-tested investment process helps investors achieve their financial goals.

If you have any questions, please don’t hesitate to leave a comment below and we will do our best to answer in a timely manner.

1The Value of Advice Report 2012, Investment Funds Institute of Canada.

 

Learn more about Trimark Canadian Opportunity Class, Trimark U.S. Companies Fund and the Trimark Investments team.

Trimark Canadian Opportunity Class, Series A provided the following performance returns as at September 30, 2014: 1 year, 20.08%; 3 years, 16.34%; 5 years, 9.29%; 10 years, 7.46%.

Trimark Canadian Opportunity Class, Series F provided the following performance returns as at September 30, 2014: 1 year, 21.33%; 3 years, 17.63%; 5 years, 10.48%; 10 years, 8.57%.

Trimark U.S. Companies Fund, Series A provided the following performance returns as at September 30, 2014: 1 year, 28.46%; 3 years, 25.32%; 5 years, 15.68%; 10 years, 5.47%.

Trimark U.S. Companies Fund, Series F provided the following performance returns as at September 30, 2014: 1 year, 30.63%; 3 years, 27.46%; 5 years, 17.61%; 10 years, 7.11%.

iShares Core S&P/TSX 60 Capped Composite Index ETF provided the following performance returns as at September 30, 2104: 1 year, 20.18%; 3 years, 11.80%; 5 years, 8.39%; 10 years, 8.48%.

iShares Core S&P 500 Index ETF provided the following performance returns as at September 30, 2014: 1 year, 19.83%; 3 years, 22.57%; 5 years, 14.98%; 10 years, 5.82%.

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2 responses to “How do Trimark’s mutual funds (really) stack up?

  1. I have been an investor in Trimark funds since 1986 (during the days of Bob Kemmell) and there is very little that I find that can be considered poor long-performance. They have had their good and bad years but always end up on top! Just takes patience. HH

    1. Thanks for your comment, hughesie. Our discipline hasn’t change since you began investing with Trimark. We are focused on building and protecting investors’ wealth and we believe that patience and discipline lead to strong returns over the long term. Thank you for your continued support.

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