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Analysis: For mutual fund investors who are seeking a low cost way to gain exposure to Canadian equities, this fund is a great choice. It is designed to track the S&P/TSX Composite Index less management fees.
The fund has performed well on a relative basis, consistently finishing in the first or second quartile over the years.
Given that this fund tracks the S&P/TSX Composite Index, it is not surprising to see that the fund is heavily weighted in Financial Services, Energy and Materials. As of December 31, those three sectors comprised more than 75% of the fund.
The fund is available in two series; an Investor Series, which carries an MER of 0.88%, which is well below the category average MER of 2.39%, or an e-Series which has a rock bottom MER of 0.33%.
While there is little doubt that this fund does a great job at tracking the index, the high levels of volatility and uncertainty in the markets would lead us to prefer a high quality actively managed fund over an index product for the near to medium term. We believe that an actively managed fund can do a better job at managing overall volatility and preserving investor’s capital in volatile markets. However, for long term investors unconcerned with the short term market gyrations, this fund is an excellent choice.