How about us? Are we still investing in mutual funds? If yes, how do we select which mutual funds to choose from?

First of all, we still have some investment in mutual funds. Some of you may be asking why? Canada has been rated as one of countries with high mutual funds fee in the world. There are two main reasons why we are still investing in mutual funds:

1. There is no commission for buying or selling mutual funds in most brokers. On the other hand, most Canadian brokers (if not all) still charge money for ETF transactions.
2. It is easier to apply dollar-cost averaging strategy. Again, this is related to the first reason. Since there is no fee involved for mutual fund transaction, we can setup automatic contribution without additional cost.

Now for the second question, how do we choose good mutual funds? We usually use funds filter from The Globe and Mail. Then we use the following criteria:

• Total assets > $25M. It is just for a peace of mind that the fund has some amounts of money. We don’t want to invest in a fund that has to be liquidated next month or next year.
• Minimum investment < $5,000. We are currently still managing a small amount of money; so we have to find funds that don’t require a huge amount of money, like minimum $25,000 to invest.
• MER < 1.5%. This is the most important one. Management expense ratio has to be less than 1.5%. Ideally, we want to put < 1.0% here. Unfortunately, we will miss some of “good” Canadian mutual funds if we do that.
• Load type = No Load. This is another important criteria. We don’t want to pay money to buy or sell mutual funds.
• Fund type = Open-Ended. Since we are not looking for insurance-type mutual funds (a.k.a. segregated mutual funds) or pooled mutual funds; then we just enter open-ended mutual funds here.

Link

• Funds Filter from The Globe and Mail
• Searching for Low Cost Emerging Market Funds
• Comparing Canadian Index Funds

A couple of days ago, someone posted a question at Canadian Money Forum about Canadian ETF screener. The good news is that there are only four ETF issuers in Canada, i.e.:

• iShares Canada
• Claymore Canada
• Horizons BetaPro
• BMO

So, as mentioned by Canadian Capitalist, we can just visit the web site of those companies and see what they have.

Alternatively, GlobeInvestor.com also provides a stock filter that can be used to search for ETFs. Go to the following URL

http://www.globeinvestor.com/v5/content/filters

and then select “ETF” in the “Security” box. Also make sure that “Toronto Stock Exchange” is selected in the “Exchange” box.

Links

• High Paying Dividend ETFs in Canada
• High Paying Didend ETFs in NYSE

Here is the trick: you can just type the same function as you normally use for stocks, i.e. “=GoogleFinance(index)”. Type without quotes. For example, to display the current price of S&P 500 index, type “=GoogleFinance(“.INX”)”.

How do we find the ticker symbol of popular indexes? There are a couple of places on the Internet that has this information. Yahoo! Finance provides them on their home page; but they use a different convention with Google Finance. Instead of prefixing the ticker with dot, they use ^ symbol.

Here is the list of popular stock indexes around the world.

• S&P 500 Index: .INX
• Dow Jones Industrial Average (DJIA) Index: .DJI
• Nasdaq Composite Index: .IXIC
• S&P/TSX Composite Index: .GSPTSE
• FTSE 100 Index: .FTSE
• Hang Seng Index: .HSI
• Nikkei 225 Index: .N225

You can do a lot of things with this feature, for example:

• Monitor your stock picks (just like we do).
• Compare your stock picks to well-known index, such as Dow Jones Industrial Average, S&P 500 or Nasdaq.
• Build your portfolio and monitor its performance.
• …

How can we do all those things? The only thing you need is an account at Google Docs. Once you have an account, login to your account and create a new spreadsheet.

Next, go to any cell and type “=GoogleFinance(symbol)”. Type it without quotes. For example, if you want to get the current stock prices of Google, you can type “=GoogleFinance(“GOOG”)”).

There are a couple of attributes you can add, such as opening price, market capitalization, and many more. We’ll discuss them in our future postings.