Management by computer

Believe it or not, there are a couple of balanced mutual funds in Canada that are managed by a computer. The AGF American Tactical Asset Allocation Fund and the companion AGF Canadian Tactical Asset Allocation Fund both base their investment decisions on the analysis prepared by a sophisticated computer program run by Barclays Global Invertors. Both have generated above-average returns over time. To the end of March, the American fund showed a 10-year average annual compound rate of return of 13.1%, best in the Global Balanced and Asset Allocation category. The Canadian fund, which has been managed by computer for a shorter length of time, had a five-year average annual return of 9.4%, well above average for the Canadian Tactical Asset Allocation category.

Obviously, this computer knows its business.