By Scott Ronalds

Exchange-traded funds (ETFs) have become a popular investment option in Canada (and elsewhere), as they offer simplicity, transparency and low fees. In this regard, they have a lot in common with Steadyhand. Where they differ is what type of investor fits their model.

In an updated paper, we compare the experience of an ETF investor (Jake) to that of a Steadyhand client (Julie). Both investors have an asset mix of 50% stocks / 50% bonds. There are notable differences between the two experiences, including costs, support and advice, and returns.

Our comparison covers the period from 2008-2014. Over the last seven years, Jake and Julie have seen all kinds of markets, good and bad. Julie’s portfolio has grown from a starting value of $250,000 to roughly $395,000, while Jake’s has grown to $360,000.

Management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. The indicated rates of return are the historical annual total returns including changes in unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns.