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Couch Potato, but finding myself a bit Attached

6014 Views 18 Replies 9 Participants Last post by  Ben
Hey everyone,

A portion of my portfolio is based on the couch potato strategy, but another portion consists of managed funds which I've had prior to becoming a couch potato. Although I'm sold on the strategy, I'm having a hard time letting go of the managed funds.

Here's an idea of my portfolio along with average return since 2003 (used strictly for demonstration purposes and not intended to reflect my personal rate of return)

Index Funds
TD Canadian Index - 12%
TD US Index Currency Neutral - 5.2%
TD International Index - 4.1%

Managed Funds
TD Canadian Equity - 14.3%
TD Dividend Income - 10.5%
TD Dividend Growth - 11.8%
TD Monthly Income - 9.6%

To reduce redundancy in my portfolio, I would like to transfer at least 2 of the above managed funds into index funds or the managed funds that I retain. I'm leaning towards eliminating the TD Dividend Growth and TD Monthly Income funds from my portfolio.

Although past performance is not an indicator of future performance, it appears that investing in the higher cost TD Canadian Equity fund has proved successful in comparison to the lower cost TD Canadian Index. In other words, the higher MER is/has been worth it. Or is/has it?

Switching it over to the TD Canadian Index fund doesn't concern me, but in an attempt to be geographically diversified I'm concerned that I wouldn't be doing myself a favour by switching a portion into the US and International Index funds. What are your thoughts about this?

I've been happy with the market and dividend reinvestment returns on the TD Dividend Income fund. I'd say I'm a bit attached to this fund (yeah, one shouldn't become too attached, I guess). Could I be misguided? Whereas, the only reason why I have an inkling to continue with the TD Canadian Equity is because of it's higher returns compared with the TD Canadian Index.

How do I satisfy my conversion to a couch potato portfolio without risking the loss of the possible benefits of what appear to be strong actively managed funds?
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I'll assume he's just a loyal customer ( beats me but many TD small investors are)....

If you want to maintain some actively managed funds why not put that $$ into a small-cap fund. There is lots of evidence that active management in this arena DOES outperform the index .... because there are sooo many losers there.
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