Abstract
Actuality of the study: Mutual funds are a favourite investment product among many investors. They provide a simple means of diversification, especially for those with smaller amounts of capital, and the popularity of mutual funds has increased with the success of the marketing efforts behind them.
 Purpose: This study evaluates the performance of actively managed and index mutual funds within the Canadian equities market.
 Findings: As index investing has increased in popularity, and other markets have become more connected and open, there is a need for research on equity mutual funds in countries outside the US.
 Originality / Value: The majority of previous research on index funds and actively managed mutual funds is focused on the US market and related indexes such as the S&P 500.
 Practical implications: This study suggests that, on average, active funds in Canada fail to beat their benchmarks net (but not gross) of the common fee or management expense ratio. Surprisingly, this research finds no positive relationship between higher fees and better gross performance. Actively managed funds also have poorer performance over the long term. This study finds that investors would be better off purchasing low cost index funds as they provide a more secure return.
 Future research: This study endorses research on other markets with inclusion of additional variables in order to explain gross performance and secure returns.
Highlights
Actuality of the study: Mutual funds are a favourite investment product among many investors
As index investing has increased in popularity, and other markets have become more connected and open, there is a need for research on equity mutual funds in countries outside the US
This research found that actively managed Canadian Equity mutual funds do, on average, beat the market gross of fees, but not net of fees, providing some support for Wermers (2000) [15]
Summary
Actuality of the study: Mutual funds are a favourite investment product among many investors. Findings: As index investing has increased in popularity, and other markets have become more connected and open, there is a need for research on equity mutual funds in countries outside the US. Практичне застосування – дослідження показало, що, в середньому, фонди активного управління в Канаді мають гірші нетто (але не брутто) показники ефективності по загальній комісії або коефіцієнту управлінських витрат. Научная новизна исследования – предыдущие исследования концентрировались главным образом на индексных открытых фондах и фондах активного управления на рынке США, а также связанных с ними индексам, как, например, S & P 500. Практическое применение – исследование показало, что, в среднем, фонды активного управления в Канаде имеют худшие нетто (но не брутто) показатели эффективности по общей комиссии или коэффициенту управленческих расходов.
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