That clears things up - thank you very much! So I never really need to take MER into account when looking at the performance of a fund. I just need to take it into consideration when making a decision between two or more funds.Question 1. Returns and MER
The industry standard for mutual funds is to report all returns after deducting the MER. So the published returns for your funds are post-MER. No need to make additional deductions.
So it looks like the TD Canadian Equity fund has beat the TD Canadian Index fund taking MER into account. Nevertheless, that's only over a 6 year period and I'm looking at another 30.
Yes, I own all four plus the three index funds. Essentially, I had those four managed funds before adopting the couch potato strategy and have kept them in my portfolio. I adopted the couch potato strategy with new money to invest upon becoming more educated about investing. So the redundancy in my portfolio has arose as a result of adopting the couch potato strategy. To eliminate the redundancy, I would need to take your advice and switch the managed funds into funds that follow the couch potato strategy.Are you saying you own all four of the managed funds you mention, plus the three index funds? It's not clear from your post. There's no way I would hold more than one of the four managed funds; not only are their main holdings very similar, but they are also very similar to the holdings of the TD Canadian Index fund which you already own. This is a common problem -- redundancy in the same portfolio. You are essentially paying a higher "managed" MER for the same holdings as your index fund.
Even though the Canadian Equity fund has outpaced the Index fund in recent years, I'm looking at this very long term and so it may be a better approach to switch fully to Index. That way the higher cost doesn't need to be a consideration when reviewing my RRSP. More conservative, but perhaps the better way to go for the long term.Always look at things in the long run. I believe buying and holding a good core index portfolio will give you stronger results than the majority of investors out there. That still leaves room for managed money, but as a diversification tool, not as a redundancy as in the funds you mention!
With the way things have been lately, I'm glad the majority of my holdings have been Canadian. But over the long term, it may benefit me to be better diversified geographically. I'll still go underweight in bonds for now I think.The classic portfolio is something like 25% in each of the Canadian, U.S. and International funds, plus another 25% in fixed income. You can choose to underweight some sectors and overweight others to match your preferences.