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How to Calculate your Average Annual Rate of Return

With Phase II of the Client Relationship Model (CRM II) fast approaching, Canadian investors will likely be on their own when trying to make sense of their reported rates of return (which will generally be meaningless for benchmarking purposes).  The Modified Dietz rate of return calculator (available in the Calculators section of the blog) continues […]

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Norbert’s Gambit at NBCN

It’s been over two years since I first wrote about using Norbert’s gambit in client accounts to cheaply convert Canadian dollars to US dollars (and vice-versa).  Various white papers followed, showing DIYers how to get around the big banks’ high currency conversion costs.  I even spoke with a few advisors and portfolio managers who had […]

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Tax Loss Selling Results

When life gives you lemons, make lemonade.  That’s how our team in Toronto has been reacting to the recent market volatility.  In the context of this common phrase, the lemons are the stock market losses and the lemonade is the deferred capital gains taxes.  Shortly after announcing our company’s new tax loss selling software, we […]

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When should I use the BMO Discount Bond Index ETF (ZDB)?

The BMO Discount Bond Index ETF (ZDB) has been slow to gather assets since its launch in early 2014.  This may be due to investor inertia or confusion over the reasoning behind holding discount bonds.  There are generally two situations in which an investor may want to consider investing in ZDB rather than the more […]

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Vanguard Lowers Their Fees…Again

The race to the bottom continues as Vanguard Canada recently lowered the fees on 11 of their ETFs. The cost that investors will pay to construct a balanced portfolio of Vanguard ETFs is now just 0.13% (the same cost as a similar portfolio from iShares, and slightly cheaper than one from BMO). iShares and BMO […]

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How to Calculate the After-Tax Return of an ETF

In our latest white paper, After-Tax Returns, Dan Bortolotti and I explain our methodology for calculating the after-tax returns of Canadian-domiciled ETFs. We were surprised to learn that funds with higher before-tax returns and similar investment strategies could have their fortunes reversed when their after-tax returns were compared instead. For example, if we compare the […]

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The PWL Tax Loss Selling Report

It’s finally here! While many Canadians were gearing up for the much anticipated iPhone 6 launch, I was patiently awaiting an upcoming portfolio management software release: the PWL Tax Loss Selling Report. PWL advisors can now generate a report that shows all non-registered client accounts that have unrealized capital losses. Any capital losses realized must […]

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Why has XIC’s tracking error been so low?

Tracking error, when referring to an ETF, is the difference between the ETF’s return and the return of the underlying index it is tracking. The ETF is usually expected to lag its benchmark index by at least its management expense ratio (MER), and sometimes more. If we compare the 10-year annualized return of the iShares […]

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Money-Weighted vs. Time-Weighted Rates of Return

Investment performance has always been a touchy subject for the financial industry. Portfolio rates of return are rarely disclosed, and investors are often left in the dark on how they are actually doing. Phase II of the Client Relationship Model (CRM II) is about to change all of that. Starting in July 2016, dealers and […]

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