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Discussion starter · #22 ·
Sounds like several of you are strongly in favour of AA ETFs... despite the higher MERs... I suppose it's a matter of really simplifying things and buying something like VGRO at this stage of my life (still working for 12 to 14 years), then switching to something like VBAL (or its equivalent product) somewhere toward the middle or end of the 12 to 14 year period.

KISS?!

Am I getting this straight?!
 
Discussion starter · #23 ·
I expect the AA ETFs to suffer near term with the bond portion but these things have a way of working out over the longer term. To be discussed again when we look back at 5 and 10 year returns in 2025 and 2030 respectively. As an aside, it will be interesting to look at MAW104 in comparison to VBAL in the next 5 years. MAW104 is now (June 30) at 70/30 with no ex-Canada bond component.
Just looked at Mawer - MER is only .91% while VBAL is .24% - that's quite a big difference, is it not?
 
It is a large difference. This is a rare(?) case where the higher costs of active management is beating passive indexing over periods of time. Is this a flash in the pan? Maybe, but they have been doing it rather consistently for long periods of time. From Morningstar it is a rare year where they underperform. 2016 was one of those years they underperformed both the "global neutral balanced" index and that category of mutual funds (3rd quartile). They have, however, achieved an 8.46% CAGR since Feb 12, 1988. Can they continue to do it? No one knows.

Re: post 21, I have never really looked over time at the AA of MAW104 to know if the current 70/30 is unusual or not. It's the first time I have noticed it.
 
I am not a fan of this product. My preference is VTI for our RRIFs and Canadian dividend stocks for our taxable and TFSA accounts. For FI we buy corporate bonds and GICs . I have never been a fan of ETFs for FI. By sticking to GICs and individual bonds you know what you get on maturity along with both principal and interest. I like VTI because if one looks at the US large caps almost everyone has a large international presence. Costco, Walmart, Exxon, Apple , Microsoft ,HD and many others are not confined to the US. I would go with a Canadian Dividend ETF if I could find one with a low MER. I am certain that my portfolio of dividend stocks outperforms any of the Dividend ETFs. I am getting a dividend average slightly below 6% with no MER. Yes our situation is a bit more complicated from an estate planning point of view but it is manageable. I guess VBAL is good for a person who has little knowledge of investing . I don't put myself in that category.
 
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