Focus List Fund , RBC a.k.a FTC461

focus list march 2013

See previous blogs on the Focus List. If you read the text in the latest edition of Strategy, the return is an admirable 14.9% compounded for the past 28 odd years, compared to  8.9% for the S&P TSX over the same period. One must be careful not to interpret this too superficially. The devil, as usual, is in the details. In this case the footnote;


We, of course, do not know what the MER (2.34%?) or transaction costs etc. etc. really amount to, as to some extend it depends if you go front-end, back-end, corporate or in a discretionary account. Even if you are a big boy or girl -  if you are not you would not get this Strategy report – you might be paying an effective 2.5%, which would reduce your return to 12.4%. According to my HP calculator that would get you $263,910, a slight difference of $217,184.   Concerning the TSX, this is properly represented, and actually existed in the real world unlike the Focus list that was an exercise in dry swimming for a good part of this time ;

tsx march 16 2013

According to the Globe & Mail’s chart the TSX gained 6.22% over that period. But indexes are normally not calculated on a total return basis as mutual funds are. So an adjustment for dividends should be added, and that gets us close enough to the  8.9%. Now we all know that if you want to make a point with charts you must choose the proper scale of both the y and x axis and if you want to start at zero. TD Waterhouse does this as follows;

TD Waterhouse Mutual Funds Profile  Charts - Google Chrome_2013-03-16_11-26-33

The purple annotations are mine. The rebound rally in wave 2 of C lasted at least a year and a half longer than expected, but otherwise we stick to the count. As we close in on ten years of no returns other than for the house, we can only advise those holding this to be patient and grin and bear it.