So you arrived at a decision that you favour the moderate or agressive type of strategy:

Moderate or aggressive approaches or a combination of both:

However paradoxical it may sound, but out of the 8500 Mutual Funds available on the Canadian market, only about 10% of funds «have their own identity». This is implied by certain individual characteristics, which differentiate the fund by it's advantages over other similar products. Most likely this is a typical situation. It can be compared to our supermarkets. The product variety is very similar in most places with slight variations in product prices. However, we customers, find exactly what meets our needs. Sometimes these products can be found in several supermarkets but sometimes only in one. At times indifferently to what we choose, but at other times very selectively, depending on positive or negative experiences we obtained from previous uses of these products. Similarly this can be translated in the selection process of Mutual Funds.

Approximately 90% of all funds on the market are «look-alikes», which can be found in any bank or financial institution. From the point of view of an average client these products are proven to be effective, however these products often cannot take into consideration the unique needs of an individual investor.

Our method: For the engineering of an investment portfolio we make use of regular funds (most widely used) as well as unique funds that have certain advantages over their competition in the market (investment mix, quality of management, tax specifics, etc.), that may benefit our individual clients.

As an example it is possible to put the spotlight on a newly established investment fund in the Eastern European Emerging Markets, in particular Excel Mutual Funds – Emerging Europe Fund.

This fund includes equity shares from such countries as Slovakia, Ukraine, Russia, Estonia, Poland, Czech Republic, Hungary and others. It is important to point out that such specific funds are very scarce in the Canadian Mutual Fund market. However, such funds occupy the top performance positions within Mutual Fund markets of Europe and the United States. Surely this fund is considered an aggressive and high-risk investment. However, it is highly unlikely that such a fund has lower quality than the Latin American markets (consisting of 50%-60%  of Brazillian equity shares), which are well represented on the Canadian market. While an additional diversification of the portfolio will only complement the Emerging Europe Fund. Moreover, additional information may be obtained HERE.

Overall all funds within this group have a long-term approach to investment.
This implies, that short-term and long-term market volatility will not affect the long-term, final goals of the investment. In isolated years these funds may even have a negative rate of return, however during more prosperous times their rates of return may significantly outperform the market indices and in such a way, easily compensate for the isolated losses.
Perhaps only one group of funds may be referred to as a moderate or even low-risk investment. It is the Balanced Funds: These consist of equity shares and bonds in various proportions. The growth or decline of some is compensated by a steady low growth of others.

The rest of the funds are divided into the following groups:

Growth or Equity Funds:
These funds primarily consist of equity shares in Canadian and international companies. These companies can be large and reliable (moderate risk), or small but with high-pace growth (high-risk). The rate of return depends on the financial situation of the individual companies (prospering or encountering difficulties), as well as the overall market situation (decline or growth).

Specialty Funds:
These funds invest in particular sectors of the economy (energy, pharmaceuticals, high-tech) as well as particular geographical zones (South-East Asia, Japan, China, Latin America, India, etc.).

Global and Foreign Funds:
Usually these funds consist of various types of investments in different international companies. These funds are not anchored to a particular country or geographical zone. The main criteria for selection – rate of return and investment prospects. Although the geographical diversification is quite high, currency risk remains relatively high for these funds.

Depending on the types of equity shares that make up the fund, as well as fund management strategies, they may be characterized as aggressive or moderate investments.

More detailed information on Mutual Funds and qualified help on engineering of an investment portfolio, may be obtained by contacting us.