Active Matters

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Legitimately Active Management®

Dynamic Funds firmly believes that Legitimately Active Management® matters.
We consider it to be the cornerstone of efficient portfolio construction.

Dynamic’s Portfolio Management teams leave no stone unturned in order to build investment portfolios that look nothing like the index.

Truly active management offers:

a definable method for growing wealth;

real value to investors for the fees they are charged;

investor-specific solutions, not just products; and

protection for investors from the mistakes of the herd.

Discover the Dynamic Fixed Income Advantage.

Dynamic’s actively managed fixed-income funds can respond to changing market conditions to increase opportunities and minimize risk.

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Explore the Dynamic Equity Advantage.

Dynamic’s Portfolio Managers build concentrated, high-conviction portfolios in order to deliver differentiated performance beyond the benchmark.

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Active Advantage

Active stock pickers outperformed their benchmark indices even after fees, whereas closet indexers underperformed.

Research by Financial Analysts Journal shows that managers with high active share had a net return of 1.3%, outperforming their low active share counterparts by 2.2% annually, as illustrated. The same research shows that high active share managers outperformed their respective indices by 1.35% during the same time period, after fees.

Fund performance from 1990 to 2009

Source: Financial Analysts Journal Volume 69 · Number 4: "Active Share and Mutual Fund Performance", Antti Petajisto, 2013 CFA Institute.

Understanding the difference: Active management vs. closet indexing

Truly active managers represent less than half of the assets globally.

Closet indexing means that investors are paying for active management while getting less than their fair share of market returns. And it’s a problem in Canada. According to a global study of the mutual fund industry, more than one-third of Canadian assets under management (37%) are held in closet index funds (funds with an active share below 60% yet claiming to be actively managed). Rather than mirroring the benchmark, active managers aim to help deliver benchmark-beating performance.

Source: Indexing and Active Fund Management: International Evidence*. Martin Cremers et al.; January 2015.

At Dynamic Funds, we believe in the power of professional advice.

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Commissions, trailing commissions, management fees and expenses may be associated with mutual fund investments. Please read the prospectus before investing. The indicated rates of return are the historical annual compounded total returns including changes in units value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any security holder that would have reduced returns. Mutual fund investments are not guaranteed, their values change frequently and past performance may not be repeated.
Views expressed regarding a particular investment, economy, industry or market sector should not be considered an indication of trading intent of any of the mutual funds managed by 1832 Asset Management LP. These views are not to be relied upon as investment advice nor should they be considered a recommendation to buy or sell. These views are subject to change at any time based upon markets and other conditions, and we disclaim any responsibility to update such views.
Dynamic Funds® and Legitimately Active Management® are registered trademarks of The Bank of Nova Scotia, used under license by, and is a division of, 1832 Asset Management L.P. © Copyright 2024 The Bank of Nova Scotia. All rights reserved.