Oct 31 2013

Indices and Benchmarks – Q3 2013

Indices and Benchmarks – Q3 2013

Reviewing the returns of indices and benchmarks is useful for comparing how your portfolio performed when viewing your latest statement. 

A portfolio is made up of several components based upon your risk profile. For example, a balanced portfolio might have 5% cash, 45% bonds and 50% equities. The Canada Pension Plan portfolio has about 50% in equities, 16.9% in real estate (and infrastructure) assets and 33.1 % in fixed income (plus other debt).

Annual Returns for Major Indices as of September 30, 2013
(source Provisus Monthly Insight – Market Data – 30 September  2013)

  • Bonds – represented by the DEX Universe -1.1%
  • Equities
    • Canadian equities represented by TSX +9.3 %
    • US Equities represented by the S&P 500 +27 % ($Cdn)
    • EAFE (Europe, Australasia and far East) +27.8 % ($Cdn)

For comparison purposes, I looked at two typical mutual fund groups to give you perspective on your own portfolio’s performance over the past year.

The Average Canadian Equity Balanced  Peer Group return for 1 year was +9% (as of September 30, 2013 source: www.Globeadvisor.com) . This calculation is simply the average of all the Canadian Balanced Equity funds in Canada. The portfolio would be about 40% bond and 60% equity.  

The Average Global Equity Balanced Peer Group return for 1 year was +13.53% (as of September 30, 2013 source: www.Globeadvisor.com). This portfolio has less Canadian Equity (compared to the Average Canadian Balanced Equity Peer Group) and increased equity weighting in international markets (typically equally divided between US and EAFE).

I recommend you review your risk profile at least annually to determine if it’s still appropriate.  As a certified financial planner, I do this at the client’s annual review and make changes as appropriate. We also discuss any major life  changes and how they may impact your retirement income plan or risk management plan.

Learn more about portfolio indices and benchmarking

Learn more about how to determine if your retirement plan is on track?



Disclaimer: “Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.”

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