Fundamental Index Mutual Funds Fire Warning Shot to ETFs
January 26th 2009
By: Press Release
NEWS RELEASE FOR IMMEDIATE DISTRIBUTION
Fundamental Index Mutual Funds Fire Warning Shot to ETFs
Pro-Financial Asset Management's Fundamental Index Funds Outperform Four out of Five Index Benchmarks in 2008, Increase in Asset Base of 25% Year over Year.
Oakville, January 26, 2009: Pro-Financial Asset Management (Pro-Financial) is pleased to report that their lineup of low cost index mutual funds that track the FTSE RAFI Fundamental Indices outperformed their benchmark marketcapitalization weighted indices in four out of five markets in 2008 on an AFTERFEE basis for the F class units of the funds.
The index mutual funds, which are among the first in Canada to offer financial advisors traditional compensation options for passive investment strategies and competes directly with Exchange Traded Funds, had net positive sales for 2008 a rarity for mutual funds and a testament to the rising popularity of the innovative indexing methodology. The five funds are the PRO FTSE RAFI Canadian Index Fund; the PRO FTSE RAFI US Index Fund; PRO FTSE RAFI Global Index Fund; PRO FTSE RAFI Emerging Markets Fund and the PRO FTSE RAFI Hong Kong China Index Fund.
Outperformance of the F Class units (NET of fees) versus their Benchmark Indices:
Canada 1.90% Over S&P/TSX Composite Index
Global 0.30% Over MSCI EAFE & Canada Index
Emerging Markets 3.63% Over MSCI Emerging Markets Index
Hong Kong China 2.61% Over MSCI Hong Kong Index
Preet Banerjee, Senior Vice President of Pro-Financial Asset Management comments, The Fundamental Index methodology avoids one major flaw of market capitalization indices: it doesn't systematically overweight overvalued stocks and under weight under valued stocks whereas a market capitalization index will do precisely that. It's a very simple concept, but very powerful. For example, when Nortel was almost one third of the cap weightindex in 2001, it was less than 10% in the fundamental index. It avoids getting caught up in the mania that many investors dislike about cap weight index tracking ETFs.
Stuart McKinnon, CEO and President further adds, Passive investment strategies are gaining popularity with investors. Until now, ETFs had been the only real choice for financial advisors who wished to harness the power ofindexation, but less than one third of all financial advisors in Canada are licensed to trade ETFs. Our lineup of Fundamental Index Mutual Funds allows almost all advisors in Canada to harness the power of low cost indexation strategies. Our total asset growth for 2008 has been +25% compared to the 25% for the mutual fund industry as a whole in Canada* watch this Space"
Glen Abbey Golf Course, Old Abbey Building
1333 Dorval Drive, Suite 100
Oakville, ON L6M 4G2
Email: info@pro-financial.ca
Tel: 905.815.6900 Fax: 905.815.6922
Toll free: 1.877.566.5145
whole in Canada*. Watch this space.
*refers to long term fund assets as defined by the Investment Funds Institute of Canada (IFIC)
About Pro-Financial Asset Management
Pro-Financial Asset Management was founded in 2002 in response to the rapidly changing needs of Canadian investors and the industry professionals who service them. Located on the grounds of the Glen Abbey Golf Course, Pro-Financial was established first as an industry leader in providing Canadians access to alternative investment strategies and solutions, before successfully expanding its investment line up to include traditional equity based offerings with an innovative twist. Pro-Financial offers both actively managed and passively managed investment solutions for Canadian investors.
Media Inquiries:
Preet Banerjee, B.Sc., FMA, DMS
Senior Vice President
Pro-Financial Asset Management
647-224-0623
preetb@pro-financial.ca
http://www.pro-financial.ca
