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The strong anti-mutual fund bias of the DIY investor sometimes goes too far.

People often come to do-it-yourself investing after a frustrating experience with mutual funds that they felt underperformed and overcharged in fees. Trying to convince these investors that funds are still worth a look in some cases is a tough job, but worthwhile. Let’s take a look.

In a recent analysis of the Top 100 mutual funds with a 10-year history as ranked by assets, Canadian dividend funds offered by the big banks stood out for their strong results. Considering how easy it is to create a regular investing plan with these funds, they’re well worth a look.

For the 10 years to Dec. 31, RBC Canadian Dividend, TD Dividend Growth, TD Dividend Income, Scotia Canadian Dividend Fund and BMO Dividend all outperformed the S&P/TSX composite total return index. The Top 100 analysis was based on the oldest version of each of the listed funds. That means the series A or I versions of these dividend funds. DIY investors who use an online brokerage may be able to buy series D versions of these funds, which would have lower fees (they’re for DIY investors who get no advisory help) and thus higher returns. Example: RBC Canadian Dividend Series D has an MER of 1.05 per cent, while the A version is at 1.76 per cent.

RBC Canadian Dividend Series D had an annualized 10-year return to April 30 of 6 per cent. The popular iShares Canadian Select Dividend Index ETF (XDV) made 5.8 per cent over that same period. Beyond competitive returns, these bank-offered Canadian dividend funds offer no-cost buying and selling. With ETFs, you have to pay as much as $10 per trade. A D-series dividend fund would work well for the sort of investor who wanted to put money in a fund every payday and other times as well.

These funds also suit newbies. You can set up an account with a minimum $100 to $500 and subsequent investments can be as low as $25. Warning: Some online brokerage firms have $25 quarterly fees for small accounts with assets of less than $10,000 to $25,000. You can sometimes avoid them by setting up a preauthorized contribution plan to the account – a bank-run Canadian dividend fund would work nicely here.