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Discussion Starter #1
I know that many of us have ETF or individual stock portfolios, but friends and family frequently ask me about simpler fund options. This might be the kind of thing suitable for a retiree or someone wanting to build savings without spending too much time managing the portfolio themselves. Maybe we can list some good, generic balanced funds we're aware of. Some criteria:

- single fund
- around 50/50 or 60/40 asset allocation
- low MER
- diversified with Canada plus foreign exposure
- diversified sector exposure (not very heavy in a specific sector)
- ideally, a long track record

Different brokerages will give access to different funds, and different minimum purchase amounts apply, so I think it's useful to list several options.
 

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Discussion Starter #2
Mawer Balanced Fund (MAW104)
MER 0.92%. Allocation is 17% Canada, 41% foreign. The 10 year return is 8.06% cagr, far above average for global balanced funds. Available through TDDI.

Tangerine Balanced Portfolio (INI120)
MER 1.07%. Allocation is 18% Canada, 42% foreign. The 10 year return is 5.24% cagr.

BMO Monthly Income, Series D (GGF31148)
MER 1.02%. Allocation is 32% Canada, 26% foreign. This is a newer low cost series so you can look at performance of the parent fund and add +0.55% cagr return due to MER drop. That puts 10 year return at 5.63% cagr and 15 year return at 6.52% cagr. Available through TDDI.

Vanguard VBAL
MER 0.25% (estimated). Allocation is 18% Canada, 42% foreign. This is a new fund and doesn't yet have a track record, but presumably it would perform similarly to something like Tangerine but with a lower cost, and theoretically, higher performance. Available through all discount brokerages since it's an ETF.
 

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Check out Beutal Goodman, Leith Wheeler, etc. as well. Don't know what they have but they operate on a similar model to Mawer.
 

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If the funds are to be used to invest incremental income on an on-going basis, fees need to be considered. ETFs incur a trading fee each time they are purchased at most brokerages. Mutual funds usually have no trading fee, but have higher MER. Need to determine what suits your particular situation.
 

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Discussion Starter #7 (Edited)
good thread!
james - what about your old favorite RBF448, i think...?
True, I did mention this one before:

RBC Monthly Income, Series D (RBF1006). MER is just 0.88%. The 15 year performance has been quite good at 6.7% annualized. The reason I did not list this one is that it's almost exclusively Canadian equities (37%) with just a tiny bit of US (8%) but no international. This is basically a pure Canadian fund, so it may not be appropriate as a single one-size-fits-all holding. It's still a good Canadian balanced fund though and is available through RBCDI and TDDI.

Compared to that, I prefer the BMO Monthly Income as it has better geographic diversification: 32% Canada, 15% US, 11% international. Although it's also Canada-focused, it has more foreign diversification. Its sector diversification is also better than the RBC one.
 

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Discussion Starter #8
Would it be a good idea to hold these funds perpetually, like set it and really forget it?
Yes, I think so. As long as it's a well established fund with a low fee and good diversification, I think you can more or less forget about it. If you're adding to savings and building up capital, just remember to automatically reinvest distributions. Also remember that since these are stock-based investments, they should be held for several decades. It wouldn't be surprising to see a 10 year stretch with poor returns... this has certainly happened before.

If the funds are to be used to invest incremental income on an on-going basis, fees need to be considered. ETFs incur a trading fee each time they are purchased at most brokerages. Mutual funds usually have no trading fee, but have higher MER. Need to determine what suits your particular situation.
Good point, and each person's situation will be different. For example, my friend was looking for something to hold within a TDDI RESP and regularly add small contributions. Though MAW104 is a great fund, it has a 5K minimum investment so it's not suitable for her. Tangerine is not available in TDDI. The VBAL trade fee makes it unsuitable for small incremental purchases. So in her case, BMO Monthly Income is the only viable option... $500 initial, with $50 additional purchases.
 

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ETFs incur a trading fee each time they are purchased at most brokerages. Mutual funds usually have no trading fee, but have higher MER. Need to determine what suits your particular situation.
I guess this depends on the brokerage. Questrade doesn’t charge you for trading ETFs while it does for MF while TD is the opposit.
 

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My only holding in my TFSA is the Mawer Balanced Fund MAW104. I have had it for 4 years now and plan on holding in going forward.
MAW104 has a good record. But it has a very low distribution. Not so good for retirees who need a steady flow of income. It would require selling of units for income. And I wouldn't risk having to do that if starting out at what may be a near top of a bull market.
 

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MAW104 has a good record. But it has a very low distribution. Not so good for retirees who need a steady flow of income. It would require selling of units for income. And I wouldn't risk having to do that if starting out at what may be a near top of a bull market.
Let's not start the argument again how one gets capital out of an asset, i.e. that with some market price inflections aside from time to time, it should make no difference whether it is by distribution, or by selling units. A dollar is a dollar is a dollar. It just feels different.

Managed payout funds by the various industry players provide a steady stream of income and it is not transparent to the investor where it comes from, e.g. income stream within the fund, selling assets, or some combination. Just like a managed payout fund, when I take capital out of my portfolio every month to fund my living expenses, I should only be looking at the effect at the bottom line of portfolio value, not necessarily from where within the alphabet soup the capital came from. Yes...yes, I know, market pricing on any given day is not necessarily a true indication of 'enterprise' value.

Added: We like to feel in control, with hands on the steering wheel, is the real difference. Us type A's will not do well in driverless cars.

Added2: I also have MAW104 in my TFSA. It is one of 2 holdings and will soon become the only holding.
 

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Let's not start the argument again how one gets capital out of an asset,
You just did! ;)

I think I explained briefly why I would not buy MAW104 now if I wanted to use it as a source of income. Not everyone wants to or has to sell assets for income purposes.

Added2: I also have MAW104 in my TFSA. It is one of 2 holdings and will soon become the only holding.
That's probably a good place for MAW104 if TFSA is only a place to accumulate funds to leave to charity or heirs. Or maybe use in dire circumstances.

I don't own mutual funds. I have sometimes considered MAW104, but I like to see dividend cash flow - not rely on market growth that may or or may not happen in our limited future. But could be good for those in accumulation stage who are still too busy at their jobs to pay attention to their investments.
 

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Let's not start the argument again how one gets capital out of an asset, i.e. that with some market price inflections aside from time to time, it should make no difference whether it is by distribution, or by selling units. A dollar is a dollar is a dollar. It just feels different.

Managed payout funds by the various industry players provide a steady stream of income and it is not transparent to the investor where it comes from, e.g. income stream within the fund, selling assets, or some combination. Just like a managed payout fund, when I take capital out of my portfolio every month to fund my living expenses, I should only be looking at the effect at the bottom line of portfolio value, not necessarily from where within the alphabet soup the capital came from. Yes...yes, I know, market pricing on any given day is not necessarily a true indication of 'enterprise' value.

Added: We like to feel in control, with hands on the steering wheel, is the real difference. Us type A's will not do well in driverless cars.

Added2: I also have MAW104 in my TFSA. It is one of 2 holdings and will soon become the only holding.
... I'm confused. I thought MAW104 is supposedly be a hands-off investment?
 

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... I'm confused. I thought MAW104 is supposedly be a hands-off investment?
MAW104 is a 'hands off' investment. I used the proverbial 'Us Type A's' as a psychological way to soften my pointed remark about Type A personalities, but it obviously came off with mixed messages.

FWIW, I target my Type A personality to stock picking the Canadian market in my non-reg account. I purposely passively index the ex-Canada part of the portfolio and fringe accounts like the TFSA. Simply don't care to bite off too much effort.
 

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Discussion Starter #18 (Edited)
Check out Beutal Goodman, Leith Wheeler, etc. as well. Don't know what they have but they operate on a similar model to Mawer.
Thanks for the pointer to BG.

Beutel Goodman Balanced (BTG772) with MER 1.20% looks really good. It's Canada-heavy with a similar allocation to BMO's ... 33% Canada, 35% international, but has done much better than the BMO one despite the higher MER: the 15 year return is 7.22% cagr.

I noticed that its 2008 loss was only -11% versus -17% to -20% for the balanced fund category. I suspect that the management did something (likely de-risking) to soften the loss. Together with the consistent outperformance I don't think this can be accidental... the management seems to be quite sharp, and is adding value.

Unless I'm missing something, this fund looks a real champ.

It's available at TDDI but beware that there is a front-end load through some brokerages. I believe there is no load at TDDI but I've never bought one of the BGs, so I'm not sure. Definitely look into this before considering buying.
 
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