WHY BNN DOESN’T HAVE MUTUAL FUND MANAGERS AS GUESTS
Can you guess why? I’ll give you a hint. Horrible performance that is easy for viewers to find out about. Mutual funds must post their performance and there are several places investors can visit to find out exactly how they are doing. My favourites are morningstar.ca and globefund.com.
Do a quick search next time you hear about some hot mutual fund and you have a roughly 75% chance to find out that the fund you were interested in performs worse than the index it tracks over the long term.
If BNN allows these fund managers on TV, viewers will eventually realize these suits on TV are not worth watching; then we can say bye bye to BNN, even with all the pretty young woman reporters (not a coincidence).
So how does BNN get around this problem? Choose guests who don’t run mutual funds but rather are wealth or portfolio managers.
Wealth managers don’t run conventional mutual funds and therefore do not have to publicly disclose their performance like mutual funds. In theory, wealth managers can create individual portfolios to match the goals and risk tolerance of each of their customers. I guess that’s how they get around the reporting requirement we see with mutual funds.
So if I’m a BNN viewer and I watch a slick, smart sounding wealth manager, I go to their website and read a lot about their strategy, their customer first focus, and the rest of the sales pitch. Many times they offer a free portfolio review for qualified investors (i.e. we won’t look at you unless you have a certain amount of money to make it worth our while).
What I rarely see is any evidence of performance results. Or perhaps some limited results are posted, but I can bet you they will only show the results that make the manager look good or they compare their results to something weird like inflation.
The problem with wealth managers is the same as it is with mutual funds: high fees and the unfortunate fact that very few people can beat the collective brainpower of the market over the long term. There is no free lunch in investing.
The best thing you can do for yourself is invest in low cost index funds and stay away from the temptation of BNN.
I’m a department head for a high school in Toronto. I graduated from the Ivey School of Business at Western University and have been a DIY investor for over 20 years.