Mutual Fund Category Percentage of managers under-performing their benchmark over the past five years
Large Cap 86.94%
Small Cap 90.61%
Real Estate 91.55%

These statistics are not a mistake. They show the percentage of managers who have underperformed their benchmarks over the past five-year period. Can you imagine how long an NHL hockey coach would last if he underperformed 87% to 92% of the time? Is there a way to explain this? I don’t believe so. Investors need to evaluate their returns and realize that there needs to be alternatives to mutual funds. I believe the following formulas currently do not make sense but hold true:
1) Bad NHL team performance for one year = Fire the coach
2) Poor mutual fund performance for five years = More assets allocated to mutual funds
3) More assets allocated to mutual funds = Great job security for mutual fund managers

I hope the above trend changes and Canadians will allocate funds based on their experiences. As Canadians realize their returns have been disappointing, I will encourage my children to work in a field that benefits from mutual fund assets moving into other asset classes. I believe that this next trend in allocation away from mutual funds will provide the best job security for professionals who add value.