Investment Funds Institute of Canada CEO and president Tom Hockin reminded delegates to the group’s annual meeting of the mutual fund value proposition, “including active collective managements against individual retail investing.”

Hockin said the value proposition includes greater transparency, a virtually scandal-free fund industry, and diversification. “In the U.S. and Canada, 95% of non-money market fund assets stayed put over the last several bear market years,” he told IFIC’s 17th annual conference in Toronto.

Hockin went on to talk about the advantages of independent money market managers in that they possess financial and business school education, on-the-job training, a full-time focus on the markets and support by expert global research teams. Independent retail investors, he says, have some but not all of this. It costs less to be invested in a mutual fund than to invest in individual stocks.

He also talked about the power of diversification. “In the U.S., nearly half of the more than $8 trillion in lost market capitalization since spring 2000 can be attributed to losses from just 25 stocks,” he says. “In Canada, out of the $400 billion lost in market capitalization, $350 billion can be attributed to one stock, Nortel.”

Hockin closed with naming the four obligations of the mutual fund industry – to support regulators, to support core fiduciary principals, to advance shareholder interests, and improve regulatory proposals.

“A strong and effective regulatory system does not mean that you are compelled to support each and every regulatory proposal,” says Hockin. “Indeed we have a duty to improve proposals, even if they are well intended, if we believe that they would harm rather than help investors.”