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Discussion Starter #1
For anyone who invests in MD funds, are they worth the high MER's? I am investing in a fair bit of MD funds in my RRSP and am considering changing them over to index funds. Most of my private investments are ETF's and index funds, which I manage on my own, but I am not sure whether to continue leaving the RRSP part to my manager so I don't double up on the same investments.

Much appreciated for your advice.
 

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For anyone who invests in MD funds, are they worth the high MER's? I am investing in a fair bit of MD funds in my RRSP and am considering changing them over to index funds. Most of my private investments are ETF's and index funds, which I manage on my own, but I am not sure whether to continue leaving the RRSP part to my manager so I don't double up on the same investments.

Much appreciated for your advice.
I had some MD Growth funds back when they sported a 1.25% MER (not sure if MER has changed today). It was an actively managed fund that invested in around 250 large cap stocks.
Its performance basically tracked the index.
For its MER at the time, it was OK compared compared to other actively managed Canadian funds (with most canadian funds sporting a > 2% MER), but I hated having to pay its tax bill at the end of every year (non-rrsp holding).

I think if you're going to buy a fund that is just going to end up tracking the index because of the way the fund spreads itself across the market, you might as well pay for a passive TD e-series index fund, its MER's are lower and you'll likely get the same performance judging by the way the typical MD fund invests its cash holdings.


(on a different subject - What I hated about the MD Growth Fund was that its prospectus boasted it practiced typical Benjamin Graham Style investing, however during the market crash of 2008, its managers basically dumped stocks for cash, which in typical Graham Style investing, they should have been switching cash to stocks, so I think the claim to their investment method was BS, either that or the investment manager got scared by a little market turbulence).
 

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They have surprisingly low MERs for No-Load managed funds, which sounds good on the surface. But of course if they are really closet indexers the MERs are too high. It could also be the $3K minimum for most of their funds is what keeps their MERs down.
 

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Discussion Starter #6
That's exactly what I've decided to do....going to ditch all my MD funds (and MD Management too) and go for indexing via ETF's.
 

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Sorry for asking but what is a MD fund exactly? Thanks
MD Management is a company affiliated with the Canadian Medical Association which sells financial products and gives financial advice to Canadian MDs who are members of the CMA.

Their funds are usually put together by other mutual fund companies.

The organization is well-run but I do agree that most people with a good understanding of finances and investments are better off DIY passive index investing.
 

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I agree with the last comment. MD funds are OK for the unsophisticated investor (which most MDs are) but if you take the trouble to educate yourself about finance (which most MDs don't) you can do better. The MERs for plain vanilla MD funds are OK but they are relatively high for international funds. The other problem is that the fees are embedded. If you paid the same fees for private wealth management they would be explicit and tax deductible. And of course fees for index funds would be cheaper. Furthermore, over the past two years or so, MD has been trying to expand its market share and has hired some rather substandard financial advisers. I got bumped from an excellent advisor to someone who left the company before our first meeting, and then to another who gave me stupid advice, like purchasing a real return bond fund with an MER equal to its return. Needless to say, I declined. I'm going to be dumping MD Managment in the near future.
 
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