I don’t think we need more mutual funds. What I’m referring to is CI Mutual Funds announcing they’ve launched two new mutual funds. Isn’t there enough choices with the already thousands of funds available to Canadians?
I had to look to see what was so special about these new funds so I looked them up on-line. I must admit I never got past looking at the first one. The CI Red Sky Canadian Equity Corporate Class.
The first thing I noticed was the name “Red Sky”. I’m sure this has something to do with the old saying “Red Sky at night, sailors delight”. But then I remembered the rest of that saying “Red Sky in morning, sailors warning”.
After looking through the “simplified” prospectus I have to say I think the second part of the saying is the most appropriate – sailors warning!
I always like to look at the section that describes the fees and expenses because I think it’s imperative to know what it’s costing me to have my money managed. Much to my surprise I found what I was looking for on pages 18 – 24! Now let’s think about that for a moment. It takes 7 pages to describe all the fees and expenses. Do I have to say anything else? Come on – 7 pages! How can you possibly figure it out? I guarantee you can’t which should be a warning – a huge warning.
I don’t have to look at anything else nor do I have to study all the outlandish claims about what these funds are going to do. The reality is nothing, unless I’m a mutual fund manager at CI Mutual funds.
New funds are created to give the mutual fund sales force something to sell. It has nothing to do with building a better mouse because quite frankly you can’t.
The moral of the story here is that next time you’re making an investment, look at what it’s going to cost you, if it takes more than one sentence, don’t just walk away, run.