I’ve been looking into the RBC North American Value Fund (Series F) and wanted to get some general thoughts on how people compare this type of active fund to lower-cost passive options.
The fund has a long track record (~20 years) and solid absolute returns (~10% annualized after fees), but it appears to have underperformed its benchmark (60% TSX Composite / 40% S&P 500) over long periods. The MER is also meaningfully higher than comparable passive options.
For comparison, a simple 60% XIC / 40% XUS portfolio would closely match the benchmark at a much lower cost.
RBC’s F-series index funds (RBF2142 and RBF2143) seem to offer similar exposure with a combined MER around 0.15%, which is also significantly lower.
A couple of general questions for discussion:
- Does it make sense to switch from NAVF to XIC/XUS/XEQT?
- From a portfolio construction perspective, are XIC/XUS broadly equivalent to RBF2142/RBF2143, aside from ETF vs mutual fund structure?
-For those using XIC/XUS, how do you think about overlap with all-equity ETFs like XEQT?
More broadly, how do people here evaluate sticking with long-running active funds that deliver decent absolute returns but lag their benchmark after fees?
Interested in hearing general experiences and perspectives — not looking for personalized advice.