Identical twins

One of the top-rated equity funds for conservative investors in my 2003 Buyer’s Guide to Mutual Funds is the CI Canadian Investment Fund, formerly the Spectrum Canadian Investment Fund. But if its low-risk style intrigues you, there are actually two funds from which to choose.

Kim Shannon, who runs the fund, also manages the CI Canadian Equity Fund. When they were part of the Spectrum group, the funds had different mandates and managers (Canadian Equity was run by McLean Budden). But now they are almost twins, with about a 95% portfolio overlap, although you would never guess it if you only glanced at the historical performance figures.

Canadian Investment has a slightly lower MER, but it’s so fractional that it is not a consideration. So if your advisor makes a mistake and acquires the wrong fund, don’t fret. One is as good as the other.

So why doesn’t CI simply fold Canadian Investment into Canadian Equity, which is about twice the size? The answer is likely the performance history. Most people would rather put their money into a fund that shows an average annual return of 10.2% over the past three years, than invest in one that lost 1.4% a year. ’s a combination of perception and psychology.