If you’re like us, you’re no cheerleader for the mutual fund industry. From what you’ve heard (or worse, from personal experience), companies that are supposed to be looking after your best interests can instead be looking out for themselves. In this world, high fees, low returns and a lot of sameness are par for the course. You know you deserve better.

We want investors’ experiences with us to be positive. So before you sign up to be an EdgePoint client, ask yourself whether you believe what we believe. This will go a long way in ensuring we have a genuine meeting of the minds and that you’re never surprised by what we do – or don’t do. 

1. We believe in the value of active management.
   Index investing is referred to as “dumb money” for a reason. Index investors don’t consider business fundamentals, don’t meet with management to know how a company is being run and have no unique insights into why an investment might have the potential to be bigger in the future. They simply follow the herd, buying more of expensive stocks and less of cheap ones because that’s how indexes work.

   Knowing we can’t outperform the market if we look exactly like it, we look different. Research, independent thinking and the curiosity to find new opportunities are our hallmarks. When you own EdgePoint or Cymbria, you hold a concentrated portfolio of our best ideas, ones that aren’t at all derived from how some index is composed.

2. We believe “risk” means losing money that you won’t get back. Risk doesn’t mean volatility.
   Volatility is only the enemy of the investor who doesn’t know the value of the business(es) they own. Because there’s almost no worse feeling than seeing the price of something you own drop when you don’t know what that something is worth.

   Volatility is our friend because it opens windows for us to buy great businesses “on sale.” Share prices will fall in the short term for all kinds of reasons, many of which that aren’t company specific. If you know the value of a business, you can take advantage of its share price declines to build your wealth. This is what we try to do for our investors.

3. We believe in lower fees for investors even though that lowers our profits.
   Bottom line, fees eat away at your investment returns. Over the long term, a fee reduction of as little as 0.25% can dramatically impact your financial future. On a $100,000 investment growing at 10% compounded annually for 30 years, that 0.25% savings amounts to a whopping $115,134 – even more than the original investment.

   Our #1 commitment to investors as laid out in our company creed is to put their interests first in all business decisions. That’s why we offer industry-low management expense ratios that have collectively saved our investors in excess of $44 million and counting* versus our competitors.

4. We believe independent financial advice is instrumental in helping investors reach their goals.
   A skilled and principled advisor can be your best counsellor, teacher and strategist. Besides advising you on investments suited to your individual situation and tolerance for risk, their role can entail retirement planning, budgeting, managing tax and estate issues, and even providing guidance on business succession.

   Most of all your advisor can serve as your rock, there to help you manage your emotions. Their top priority is to keep you from unduly separating yourself from your hard-earned money, especially when you’re panicked because your portfolio seems to be performing poorly or overly exuberant when it’s been shooting straight up.

5. We believe that for you to trust us, we have to put our money where our mouth is.
   We invest the lion’s share of our savings alongside our investors. You’ll undoubtedly agree that personal commitments to products by employees fosters a strong sense of accountability and ensures an alignment of interests with clients. If we expect investors to eat our cooking, we have to also be willing to dig in ourselves.

This list isn’t about telling you what to do, only what makes us tick. If you think the same way, we might be a good fit! 

Find out more about who we are and what we stand for in The DON’Ts of EdgePoint.