EdgePoint was founded in November 2008 because we believed the relationship of trust in our industry was broken and investors deserved investment-led firms not marketing-led ones. Here are some of the ways we think that's still a novel concept in the Canadian investment industry.
1. Company structure
WHO'S IN CHARGE?
99% of the industry
Public shareholders steering
the ship
Sales- and marketing-led companies focus on
flavour-of-the-day funds that have a high probability of selling fast and furious. At EdgePoint, we like to call them “supermarkets.” Endless aisles of products enticing customers to buy impulsively. Crypto, ESG, tech, marijuana, inflation-protected…the list goes on. Shareholders love fund supermarkets – more products, more assets, more fees, more dividends.
Click here to view the supermarket of funds launched since November 2008.
EdgePoint
Structured for investor success – Investment-led & privately held
Good luck finding our total assets under management on our website. Bragging about success in gathering assets doesn’t help an investor. We exist to grow hard-earned wealth and that’s what we’re proud of. EdgePoint is a private firm owned and operated by employees, meaning we're not accountable to shareholders. We only launch a fund if we believe an untapped opportunity exists that can compound our clients’ wealth.
EdgePoint has a focused product lineup applying a single time-tested investment approach.
TIME HORIZONS
99% of the industry
Short-term focus
It’s common in the fund industry to see wholesalers bragging about 1-year performance. Short-term returns speak for themselves (and they don’t say much). Shout out to the wholesaler (they know who they are) who compared our funds on a two-week basis! That’s some premium cherry picking at the ol’ supermarket!
EdgePoint
Long-term view and incentives
Our first definition of success is 10 years of investment performance at the top of our peer group. Straightforward, but it takes considerable skill to get there. We’re laser focused on achieving this long-term success and don’t allow short-term noise to get in
the way.
FEES
99% of the industry
The more, the merrier
Sales and marketing companies are expensive to run. Leafs’ billboards don’t come cheap, but how does that ad help your clients? Why should investors pay for golf balls or other trinkets and trash? They won't add to investors’ wealth.
EdgePoint
Always trying to lower the bar
We’ve kept fees lower than the industry and continue to find ways to drop them further. We don’t have a marketing team, nor do we advertise. The result? About $130 million in savings i and $5.5 million in rebates from the 10-year Partner Program. ii We continue to push the envelope with our offering memorandum funds having a performance fee instead of a management fee – we don’t get paid unless you do.
PARTNERSHIP
99% of the industry
One-way street
How open and honest are fund companies with their investors? Don’t be the last to know that a whole team of Portfolio Managers left or that your “value” fund is now magically a “growth” fund...or vice versa.
EdgePoint
There’s an “i” in EdgePoint,
but not in team
Good relationships need open and honest communication, as well as having shared values.
Our relationship managers are also proud owners of EdgePoint, and that makes a world of difference.
We won't be everything to everyone – only partnering with those who share our long-term values. By partnering with only 2% of Canadian advisors, we can give them the time they deserve. The top 20% of our advisors have shown alignment by holding 79% of our clients’ retail assets. iii
2. One investment approach vs. flavour of the day
THE “WHY” BEHIND WHERE YOUR MONEY GOES
99% of the industry
Flavour of the day approaches
Do wholesalers believe in the funds they’re selling and the investment approach? Can they share their personal trading account statements proving their alignment? It might explain why they try to convince advisors to jump their clients’ assets from fund to fund when they underperform.
If these wholesalers can’t explain what’s in the fund or why the approach works over time, investors may be basing their future returns on hope and flashy sales material.
EdgePoint
A rational business-owners’ approach
We apply a time-tested approach that’s built material wealth for investors over the long term.
We’re business owners buying businesses. Deceptively simple. We will always stand up for this approach that’s been time- and battle-tested.
RELATIONSHIP WITH BENCHMARKS
99% of the industry
Covering their ass-ets
Fund managers tie decisions to their benchmark because they don’t want to be fired for underperformance vs. that benchmark (a.k.a., career risk). Performing in step with the benchmark doesn’t do investors many favours, but it sure is easier to
hide behind.
EdgePoint
Leaving benchmarks on the bench
Our incentives are tied to long-term performance vs. our peer group. We look very different from our benchmarks because our job is to beat them. Our willingness to look different speaks volumes and has yielded results over the long term.
3. The people
INVESTMENT PROFESSIONALS
99% of the industry
Hello, my name is…
Firms that don’t stand for anything don’t earn employee loyalty; they try to buy it. Would you trust your long-term investments to someone whose fidelity only lasts until their paycheque clears?
Look at the industry’s manager turnover (whether by their choice or otherwise) since we launched. Yes – some retired but what about the rest?
Do you know what the level of co-investment is from the Portfolio Managers managing your hard-earned wealth?
EdgePoint
Owners don’t leave
We foster a culture of ownership because we’re all owners in the business. Any time you talk to someone here, you’re speaking with a committed owner of the business.iv Owners simply don’t leave. They’re also heavily invested in the products they sell their clients.
At EdgePoint, our employees have over $319 million invested alongside our clients. v
WHOLESALERS
99% of the industry
Selling you out
It’s probably a coincidence wholesalers contact advisors when they want to promote a (probably new) fund but disappear when advisors have questions about a recently purchased underperforming fund.
And when they do show, the only things they bring are a pen with a logo and flashy materials about a new fund that will definitely work this time.
It’s almost enough to make you squeeze a branded stress ball.
EdgePoint
Here when you need us
Every member of our Relationship management team is also an owner in our business. They believe that a key to good partnership is setting up everyone to succeed.
They bring education on the approach, not flashy materials on a product. This helps your clients become better investors and understand why we invest the way we do. It makes it less likely that they’ll be their own worst enemy by chasing short-term returns or selling when their funds are down.
Conclusion
When you’re investing for the long term, you should know who you’re working with and what they believe in. We’ve spent the last 14 years working to rebuild investors’ trust with the mutual fund industry, while other companies worked on pleasing their shareholders and other stakeholders. Although seasons and markets might change, EdgePoint’s commitment to doing right by our investors remains unwavering. For investors’ sakes, we hope 14 years from now, our approach won’t still be considered novel in this industry.