Investment Portfolio

At Polaris Wealth we create low-cost, tax-efficient investment portfolios tailored to the unique needs of our clients. Instead of high-cost active management, we follow an evidence-based approach using low-cost exchange-traded funds (ETFs) and ETF-like mutual funds to capture market returns. 

Low-cost

The fees you pay have an enormous impact on your long-term return. 

According to Morningstar's 2019 Global Investment Experience Study:  Fees and Expenses, Canada is among the highest fee-paying countries in the world. The median Canadian investor following a commission-based advice model paid 2.28% in fees. 

Fee at Polaris are much less and can be viewed on our Pricing page. You choose the only services you require and pay only for what you need. 

Tax-efficient

Tax efficiency in portfolio construction comes from three sources: 

• the specific investment products used (ETFs, funds, individual stocks or bonds)
• the location of that product in your portfolio (registered vs non-registered accounts)
• tax-loss harvesting (crystallizing losses when possible to reduce capital gains taxes)

Polaris uses only tax-efficient ETFs and broad market index funds in portfolio construction. We ensure the correct placement of these securities in the appropriate accounts to maximize your after-tax returns. In addition, we monitor your accounts for tax-loss harvesting opportunities annually. 

Evidence-based

Each year Standard & Poor's measures the performance of actively managed funds against their relevant S&P DJI benchmark indices. The results are published in the S&P Indices Versus Active (SPIVA) Scorecard. The active management industry will often show results of a group of funds that have outperformed benchmark indices but they do not tell the whole story. The following is an except from the most recent SPIVA Report card and explains the adjustments made to account for these issues:

• Survivorship Bias Correction: Many funds might be liquidated or merged during a period of study. However, for a market participant making a decision at the beginning of the period, these funds are part of the opportunity set. Unlike other commonly available comparison reports, SPIVA Canada Scorecards remove this survivorship bias. 
• Apples-to-Apples Comparison: A fund’s returns are often compared with a popular benchmark regardless of its investment category. SPIVA Canada Scorecards make an appropriate comparison by measuring a fund's returns against the returns of a benchmark that reflects the fund’s investment category. 
• Asset-Weighted Returns: Average returns for a fund group are often calculated using only equal weighting, which results in the returns of a CAD 10 billion fund affecting the average in the same manner as the returns of a CAD 10 million fund. The SPIVA Canada Scorecard shows both equal- and asset-weighted averages. Equal-weighted returns are a measure of average fund performance. Asset-weighted returns are a measure of the performance of the average invested Canadian dollar. 

The evidence in this report clearly shows the underperformance of traditional actively managed funds and the following is a summary of the results:

Percentage of actively managed funds outperforming their relative benchmark index

Source: SPIVA Canada Year-End 2019 Scorecard

In every time period shown above, actively managed funds dramatically under-performed their relative benchmark index. By following the evidence and avoiding traditional high-cost actively managed funds, investors can have much more favourable investing experience. 

Broad-market or Factor-based

Polaris Wealth offers two types of low-cost tax-efficient portfolios:

• Broad-market portfolios designed to capture the returns of market indices
• Factor-based portfolios designed to capture the returns of market indices, but with "tilts" towards certain market factors.  These factors are increased weightings in value and small cap securities which have historically exhibited higher expected returns  

Sustainable Investing (ESG)

Polaris Wealth also offers sustainable investing portfolios using both broad-market and factor-based approaches. Sustainable investing takes into consideration environmental, social, and governance-related (ESG) investing issues to improve long-term results. There is a growing recognition that companies following a sound ESG approach to corporate management may benefit economically in the long term. Following this approach may lead to a better planet and improved long term results.