Actual fund performance over the past twenty years matches this performance of the indexes. The category return of Canadian Dividend and Income Equity Funds outpaced the return of the more diversified Canadian Equity Funds category. This category contains funds and ETFs focused on core market exposure and investment styles, including value, growth, low volatility and momentum.
However, this outperformance has not persisted.
Over the past five and 10 years, the Canadian Equity category has become the leader in response to the changing structure of the Canadian market, which has evolved in five important ways.
- The outperformance of Canadian banks, a mainstay of Canadian dividend strategies, has diminished as their growth opportunities in Canada have dwindled and their expansion has centred on the competitive U.S. market.
- The materials sector, which has been in a multi-decade bear market, has shown improved returns…
