: _ Russell
_ Meldowan

‘THE BOTTOM LINE

‘

THIS TIME last year, everyone
~- brokers, banks, planners, you
aame it. was extolling the
virtues of Mutual Funds.

One’ year later, hindsight being
20/20, fresh in my mind is the dis-.
mal performance of many funds -
this past year. Let me put the high-
ef interest rates and | disappointing
performance’ of equity’ investments
into some perspective..." °:

~:For' my clients; I ‘choose and
monitor funds with a miitial funds:
database that is updated regularly
on computer. It isn’t a fancy'pro- ~
gram, but it does allow me to rank.
and screen funds by’ any criteria 1
choose.’ -..

For example, whi le updating

my rates for Government Coupons’ ~

recently 1 noticed that rates s were

these safe’ investments: The criteria

1 used in my search was:
Performance. better than 9. 50%.
rage annual’ compound return :

Over.the past five years,and 100%
PRSP eligibility. I | paid no atten-.
tion to volatility, size or type...

+: At last count there was well: |
over 1,000 mutual funds available
to Canadian investors. My’ search:
uncovered 23 That’ 's it: t. Twenty

2

SR Ye EY ASLAN LO EAL ES,

i Fund madness

three funds that offered returns
over the past five years that are
near what you can get in
Government-guaranteed investment
for the nest five, 9.15%. ;
What's more is that most of the
funds that did really well over the
last five years are Small Cap funds,

and will probably not outperform

the market this year or next. ©
All this raises a few questions

" about investing in Mutual Funds.
~ For example: -

What are my alternatives if GIC *
rates aren’t attractive enough?

Isn’t this the. time to Average
Down?

- What funds will do. well this
year? .

What do I do with my CSBs

-” and B.C, Savings Bonds that only
pay 6.25%. ©

And, tell me which funds make
up the 237,
LT'll also let you know that only

. three funds of those 23 are offered

by banks and half are no-load. -

(Note: I also I didn’t subtract the | .

annual management expenses from
the returns.)

The Bottom Line is: You have
to decide what to do with your
RRSP this year. If you choose to
wait until the last minute to head
to your bank, you've still made a
decision but perhaps not the best
one. The recent unexpected

‘increase in interest rates has made

guaranteed investments look very
attractive.

Now more than ever, I am sug-
gesting investors use a self-direct-
ed RRSP to make the most of their
retirement savings and use.
Coupons to add some stability and
good returns to their portfolio.
if you want the list of the 23 -
funds, just call me at 661-7475.

Russell Moldowan is an invest-
ment adviser in Vancouver. He
advises on investment management
and retirement planning. Call or
write to Russell at (604) 661-7475,
P.O. Box 10342, Pacific Centre,
Vancouver, B.C., V7Y 1H6. Or by
E-mail at russellm@ unixg.ubc.ca, *

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