Friday, November 20, 2009

Actively Managed ETF: Terrible Performance Versus Passive ETF

Horizon AlphaPro ETFs features a few actively managed ETFs. There is the Gartman fund, HAG, the Fiera Tactical Bond Fund, HAF, a Income Plus Fund (with no publicly available information, and the new seasonality ETF HAG.

Please take a look at the MER and the way the managers make money out of this.

Is this an ETF or a hedge fund?

The only one that has existed for a reasonable time to analyze performance is the HAX. This ETF attempts improve on the TSX60 index (which is tracked by the iShares XIU ETF). Please see the comparison chart this year:

(please click to enlarge).

The difference in ROI is quite significant:

XIU: +25.37%

HAX: 11.15%

The passive ETF's performance is 2.27 times better than the 'actively managed' ETF!

Here is the comparison for the last 6 months:

The passive ETF returns 4.78% more in 6 months, it 1.63 times better.

Or for the last 3 months:

Again, 7.20% vs 5.23% (passive is 37% better, in 3 months)

Or for the last 1 month:

The passive returns a positive 0.75%, while the 'active' loses 1.19%.

Or even for the last 5 days:

The simple XIU vastly outferforms the 'actively managed' HAX on every time period. These ETFs are 'actively' losing their isvestors lots of money.

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