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Index Investing

Four of Canada’s brightest investors go head to head
in a battle for portfolio supremacy

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Meet Index Investor Andrew Hallam

Latest Columns

Three good investment books you’ve probably never heard of

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

In 1973, three years before Vanguard created its first index fund, Burton Malkiel wrote the classic book, A Random Walk Down Wall Street. It ruffled plenty of Wall Street suits. The Princeton economics professor argued that actively managed mutual funds were a waste of money. He said most of them perform poorly compared to their index benchmarks. So when Vanguard created the first index fund in 1976, Mr. Malkiel became one of the firm’s biggest cheerleaders.

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How do Trimark’s mutual funds stack up?

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

Some mutual funds perform like penguins in pigeon races. If you’re stuck with a frosty portfolio, it may not be your adviser’s fault. Nor is it necessarily the fault of those running your mutual funds. So whom can we blame? High hidden fees are the usual suspects.

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A look inside Canada’s hottest ETFs

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

Quick question: Which are Canada’s hottest index funds? Considering the stampede into Vanguard Canada’s ETFs since their 2011 debut, many would give them the nod. In fewer than two years, their assets under management exceeded $1-billion.

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How to deal with an uncertain market: Diversify, relax, rebalance, repeat

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

The U.S. stock market has risen 47 per cent in less than two years. The international market is up more than 33 per cent and the Canadian index has risen about 25 per cent. If you’re adding money to the markets, you should be disappointed. I am. I prefer to see sinking markets.

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Unusual index fund company avoids typical tactics

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

Six years ago, Montreal-based financial adviser Sonny Wadera packed his bags for Texas. He wasn’t giving up on the investment business for a stake in a Lone Star oil operation. He was simply going back to school for a couple of days. His goal was to build better portfolios for clients at Kelson Financial using indexes created by Dimensional Fund Advisors (DFA).

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How indexing helped these retirees live footloose and fancy-free

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

If you struck up a midweek conversation with Billy and Akaisha Kaderli, you might peg them as early retirees. And you would be right. The energetic 61-year-olds share the glow of a couple freed from the rat race. But a few things make them different. For starters, they have been retired for 23 years. They also travel the globe.

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Trick question: What performs better than an index fund?

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

Few teachers upset their students on purpose. But I do it every semester.

“Broad index funds comprise every stock in a given market,” I explain to my high-school personal finance class. “Nobody trades them. Actively managed funds, on the other hand, have managers at the helm, sniffing out the very best stocks.”

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Beware the pitch for actively managed funds. Stick with index funds

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

There’s little denying that folks regularly consuming leafy green vegetables are healthier than those stuffing themselves daily with burgers and fries. Sure, you might find someone who shuns vegetables, dines exclusively on Big Macs and lives to 100. But that doesn’t mean you should give it a try.

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IA Clarington funds vs. indexes: How they stack up

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

It takes chutzpah to challenge index funds if you’re an actively managed mutual fund company. Indexes are cheap. As such, their long-term performances outrun most active funds. IA Clarington Investments Inc. suggest their funds are different.

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Manulife funds vs. index funds: Here's how they stack up over 10 years

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

Imagine professional golf players, at their discretion, dictating which of their shots would go on record for tournament scores and which would be swept under the rug. If regulations allowed such practices, a mediocre player with a large broom might triumph at the U.S. Open.

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How do CIBC mutual funds measure up against its index funds?

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

Every day, thousands of Canadians settle into chairs in front of financial advisers. Most people don’t have an interest in the stock market. They know they should be investing in RRSPs, but they don’t have the time or inclination to bother with individual stocks or ETFs. Instead, they trust an adviser to select investments for them. In most cases, they end up with a portfolio of mutual funds.

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How do TD’s mutual funds stack up against its index funds?

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

Quirky imagery works well when explaining concepts to kids. Based on my experience as a high school personal finance teacher, the more ridiculous the better. So, what do index fund managers do all day? They work from hammocks like chilled hippies – if you ask my students.

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Putting Fidelity’s funds to the test

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

Fidelity Investments may be the bravest mutual fund company in Canada. They compare all of their fund performances against indexed benchmarks.

Most actively managed fund companies, if they compare their results to indexes at all, are highly selective when doing so. They tout top performers in full-page magazine ads, while their dog funds cower in the company kennels.

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How RBC funds compare against index funds, ETFs

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

Thomas Edison was dubbed a wizard when he created the electric light bulb. The Wright Brothers became American icons when they flew the first airplane. But when John Bogle created the first index fund in 1975, it was labelled Bogle’s folly. That a passive collection of stocks could outperform most professional money managers was considered a joke. Now, nobody’s laughing. Vanguard’s Total U.S. Stock Market Index, thanks largely to its popular, lean-cost structure, is now the largest fund on the planet.

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Like F1 race cars, high dividend-yielding indexes have evolved

ANDREW HALLAM

Purchasing high dividend paying stocks is a lot like driving an old F1 race car. You select your stocks, like choosing a gear. Feeling the clutch, the manual gearbox and revving engine behind gives a sense of control.

But F1 cars have evolved. Transmissions are now semi-automatic, removing some of the drivers’ work. As a result, the cars are faster. Dividend investors may wish to do likewise, with high dividend yielding indexes.

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A three-step plan for turning your child into a saver

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

One of the things I’m most proud of this year is talking lots of kids in my high school personal finance class into opening investment accounts. The youngest was 14, the oldest 18.

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My wish list for new indexing products

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

I recently received an e-mail from Magnus Boecker, CEO of the Singapore Stock Exchange. The former president of the Nasdaq OMX Group had seen me speaking on CNBC Asia, and wondered whether I was interested in getting together for coffee.

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Why willpower trumps smarts in financial success

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

Walter Mischel of Stanford University used a bunch of four-year-olds to change how we think about willpower. He placed the kids in a room without any distractions. He then stuck a marshmallow in front of each child.

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Can you really beat the market from your laptop?

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

When newspapers sponsor public challenges for active investors to strut their stuff, the results are often embarrassing. In 2012, the British paper The Observer pit selected professional stock pickers against a group of children and a cat named Orlando. The feline purred to the top, gaining 10.8 per cent, compared to 3.5 per cent for the professionals and a 2.9 per cent loss for the kids. (Orlando made his picks by throwing a toy mouse at a grid of numbers allocated to different companies.) How did Vanguard’s British stock market index measure up? It gained 17.4 per cent.

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Indexing with muscle: Sizing up iShares’ Portfolio Builders ETFs

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

A portfolio of classic action heroes has helped The Expendables film series kick some box office butt. The Sylvester Stallone-led mercenaries, including Jet Li and Arnold Schwarzenegger, are now filming their third instalment.

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Berkshire Hathaway: A stock that even indexers can like

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

Today I’m a full-fledged index investor, but there was a time when I owned some individual stocks. What was my favourite company back then? Berkshire Hathaway Inc.

I was a devoted fan. For more than a dozen years, whenever its share price dropped, I scurried to buy more. By 2011, my Berkshire holdings had grown to $370,000 (U.S.). Like most stock investors, I had my reasons for owning it, but one in particular might surprise you. To me, it was an index fund on speed.

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How to assess five new Vanguard ETFs

Andrew Hallam

Vanguard Canada is still a scrappy newcomer to the Canadian scene, where it has to face off against much bigger competitors in the battle for investors’ affection, but it’s growing quickly by offering exchange-traded funds (ETFs) designed to appeal to cost-conscious savers.

With the announcement of five new ETFs this week, the firm now features 16 low-cost index funds with an industry-low average management fee of just 0.21 per cent.

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The Permanent Portfolio: the only investment plan you'll ever need?

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

There are permanent portfolios and then there’s the Permanent Portfolio.

Devised decades ago by the late investing writer Harry Browne, it combines gold, stocks, long-term bonds and cash in equal proportions. The mix never varies and the investor’s only responsibility is to buy or sell once a year, as needed, to maintain the target allocation.

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With U.S. stocks on a tear, our index investor finally makes a trade

Andrew Hallam

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. This is his first column. Follow his contributions here and view his model portfolio here.

This might sound crazy, but I don’t want to see my indexes rise in value. My Vanguard U.S. stock market index has gained an irritating 22 per cent in Canadian dollars; Vanguard’s FTSE Developed Market ETF has also misbehaved, gaining 15 per cent.

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Low-volatility funds promise an easy ride in wild markets

ANDREW HALLAM

Many investors feel as if they’re walking in high heels on black ice. Based on the last dozen years, it’s easy to see why. Sure-footed gains have been followed by spectacular crashes.

U.S. stocks enjoyed history’s longest bull market through the 1990s then fell 34 per cent between July, 2001, and March, 2003. Canada’s stock market doubled after 2003 only to see most of those gains wiped out between June, 2008 and March, 2009.

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Welcome to Strategy Lab




Stock market ideas, investing insights (and competition): Watch and participate as four of Canada’s brightest investors go head to head in a battle for portfolio supremacy. Whether you’re a dividend collector, a value hunter, a growth junkie or an indexing enthusiast, you’ll find inspiration for your own investing.

About Andrew Hallam

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