With all the performance data from the June 30th quarter-end piled up on my desk and getting staler by the minute, I thought I'd better get at it.
I was going through the SEI Pooled Fund survey (which reviews the investment performance of money managers serving institutional clients) and I learned lots about who is hot and who is not, but ... the most striking numbers I saw were on the first page. There are no specific managers mentioned on this page, just a summary of all the medians and market indices.
Over the last five years (a period which included almost 2 years of bear market at the beginning), the S&P/TSX Composite Index had a rate of return of 10.5% per year. In actual fact, this number understates how well Canadian equity investors have done because until recently, the index did not include income and royalty trusts.
Over the same period, the MSCI World Index (in C$) was down 0.8% per year.
All of this is very obvious I know, but when we see that divergence in the performance data over long periods, our antenna should go up. In the long run, equity markets are highly correlated and it's hard to see why our economy is going to grow faster than the rest of the world. I don't know when our winning streak is going to end (keep it coming), but you can be sure that the next 5 years are not going to be like the last 5.
For more on this theme, see the Globe & Mail column entitled, Time to Sell Canada Inc.?