Skip to main content
Canada’s most-awarded newsroom for a reason
Enjoy unlimited digital access
per week
for 24 weeks
Canada’s most-awarded newsroom for a reason
per week
for 24 weeks
// //

For every reader inquiry about mutual funds I get these days, there are probably 50 others about exchange-traded funds.

That’s why this recent mutual fund-related query from a reader jumped out at me: “I look forward to your upcoming annual Buyer’s Guide to ETFs series,” he wrote. “It’s possible that you’ve addressed this issue in a column not too far back, but is there still any role for mutual funds in a portfolio? If so, under what circumstances?”

The short answer to this question: For sure. Mutual funds can work for people who want a simple, accessible vehicle for making contributions to their investments on a regular basis with no commissions or fees. Funds also offer access to smart managers and strategies that complement other types of investments, including index-tracking ETFs.

Story continues below advertisement

The drawback of mutual funds is the prevalence of high fees that undermine returns. There is value in fundland, but you have to put some work into finding it. Start with low-fee fund companies like Beutel Goodman, Leith Wheeler, Mawer and Steadyhand. Each serves the do-it-yourself investor and offers fees that are lower than funds sold by advisers. A balanced, equity or dividend fund from these companies could provide a solid foundation for a portfolio that adds exposure to other sectors or themes via ETFs or individual stocks and bonds.

Funds from traditional fund companies that work through adviser networks or bank branches cost more, which means they have a higher hurdle to get over in delivering returns that compare well with ETFs.

Look for mutual funds that attack the market in a different way than ETFs. Avoid “closet index funds,” which are actively managed mutual funds with high fees and portfolios that resemble the indexes tracked by ultra-low-cost ETFs.

When selecting a mutual fund, the DIY investor should insist on a Series D version. Series D, widely available from online brokers, offers a reduced management expense ratio compared with the usual Series A or B version meant to be sold by advisers.

Total investments in ETFs are about one-seventh the amount held in mutual funds, but it’s ETFs that keep popping up as a topic in my inbound e-mails. Let’s not count mutual funds out, though. Amid the dross, there are some mutual fund industry nuggets.

Note: The first installment of the 2021 Globe and Mail ETF Buyer’s Guide will appear Feb. 12 and the five subsequent segments will run every two weeks after that. Here’s the 2020 version.

-- Rob Carrick, personal finance columnist

Story continues below advertisement

This is the Globe Investor newsletter, published three times each week. If someone has forwarded this e-mail newsletter to you or you’re reading this on the web, you can sign up for the newsletter and others on our newsletter signup page.

Stocks to ponder

NFI Group Inc. (NFI-T) This is a Winnipeg-based manufacturer of mass transportation products under various brand names. Gordon Pape had recommended NFI in the past in part because of its emphasis on energy-efficient vehicles. But by mid-2019 the company was experiencing a dramatic drop in orders and the backlog was declining. Now things are starting to turn around for the better. Gordon takes a fresh look at the stock as he restores his buy recommendation.

General Motors Co. (GM-N) If you are wondering whether Tesla Inc. still has a stranglehold on investor affection for electric vehicles, check out the recent rise of GM. The old-guard Detroit-based automaker long associated with gas-guzzling pickup trucks and SUVs, has been on a tear recently: Its shares have risen 34 per cent since the start of 2021, outperforming Tesla – itself no slouch – by nearly 14 percentage points. The rally could be worth pursuing, but you’ll need steady nerves. The reason: GM is now being valued by the market as an electric vehicle (EV) maker, which means that its share price is reflecting an upbeat scenario of soaring EV sales. David Berman tells us more.

Copper Mountain Mining Corp. (CMMC-T) Shares of this company are surging amid a steady comeback in the price of copper, a commodity considered the bellwether for economic growth and a key metal used to help the world transition to a low-carbon economy. As Brenda Bouw reports, analysts see more upside.

The Rundown

Story continues below advertisement

This is when you’ll know that dividend stocks are in big trouble because of inflation

Using real estate investment trusts as an example, Scott Barlow has this analysis for estimating when it’s time for dividend investors to worry about inflation’s negative effects on income-paying stocks.

How investors can take advantage of big changes in REITs

Many real estate investment trusts have been hit hard by the economic impact of the pandemic, especially those that focus on office space, the hospitality industry and shopping malls. But some other types of REITs are profiting from the shift in consumer behaviour we have seen in the past year. Gordon Pape tells us about three Canadian-based REITs that are among the leaders in taking advantage of this trend.

As renewable energy stocks soar, some see stretched valuations

Canadian renewable energy stocks have been on a tear for the past 10 months, rising to record highs as investors anticipate steady growth in wind and solar power and concerted efforts to combat global warming. But the gains are raising questions about lofty valuations. David Berman reports.

Story continues below advertisement

Tech shares could retake market reins as earnings heat up

A bevy of major U.S. earnings reports next week led by Apple, Microsoft and Facebook could help technology and growth stocks reassert their dominance after a recent run by banks, energy and other potential beneficiaries of an economic reopening. Lewis Krauskopf of Reuters reports.

Wall Street hedges against possible bumps in U.S. vaccine rollout

As U.S. stock prices have marched to record highs, futures contracts for Wall Street’s “fear gauge” show some investors are buying insurance against market turbulence that could erupt if surprise glitches hit the U.S. rollout of COVID-19 vaccines. April Joyner and Sinead Carew of Reuters report.

Also see: Not company earnings, not data but vaccines now steering investor sentiment

Others (for subscribers)

Story continues below advertisement

The week’s most oversold and overbought stocks on the TSX

Friday’s analyst upgrades and downgrades

Thursday’s analyst upgrades and downgrades

Friday’s Insider Report: Director invests over $2.5-million in this trust

Thursday’s Insider Report: Value investor sinks another $1-million into this REIT

Number Cruncher: Five aerospace dividend stocks with sustainable dividends

Story continues below advertisement

From ‘unloved’ to ‘favourite,’ Britain’s stock market rides a wave

Others (for everyone)

Globe Advisor

New annual listing to identify Canada’s best financial advisors

Are you a financial advisor? Register for Globe Advisor ( for free daily and weekly newsletters, in-depth industry coverage and analysis, and access to ProStation - a powerful tool to help you manage your clients’’ portfolios.

Ask Globe Investor

Question: My understanding is that I should hold U.S. dividend-paying stocks in a registered retirement savings plan, instead of a tax-free savings account, to avoid the 15-per-cent U.S. withholding tax on dividends. My question: Does this same advice also apply to Canadian-based ETFs (for example from Vanguard Canada or iShares Canada) that focus on U.S. dividend-paying stocks?

Answer: No. Canadian-listed exchange-traded funds are not exempt from the 15-per-cent U.S. withholding tax, regardless of the account in which they are held. Only U.S.-listed ETFs held in a registered retirement account (such as an RRSP, RRIF or LIRA) qualify for the exemption from withholding tax under the Canada-U.S. tax treaty.

--John Heinzl

What’s up in the days ahead

Ian McGugan will argue that investors needn’t fret about the recent wave of inflation warnings.

Davos goes virtual: World market themes for the week ahead

Click here to see the Globe Investor earnings and economic news calendar.

More Globe Investor coverage

For more Globe Investor stories, follow us on Twitter @globeinvestor

You may also be interested in our Market Update or Carrick on Money newsletters. Explore them on our newsletter signup page.

Compiled by Globe Investor Staff

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies