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Looking for suggestions as per above, for parents who have a 2yr old & just set up an RESP, who have zero interest in regularly monitoring and/or
tweaking the plan on any regular basis. VGRO.? other(s)?
Lets keep discussion yo suggestions for the plan...NOT the attitude of the parents. 馃お馃お馃お
 

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So I have 3x kids and we have 3 RESPs and I wanted the same simplicity. I was using MAW104 - Balanced Portfolio, low fees and above average returns with no measurable increase of risk. I follow the company's investment metrics and they are a value investing co that does a bunch of research.

After using MAW104 for a while (yrs) I decided that MAW130 - Global Balanced offered a slightly better return and a bit of a broader investment capacity due to being Global.

With COVID and the whole market being at all time highs and a majority companies have limited to no sales I struggle to accept current valuations and own no equities at all. So, currently our RESPS are cash - I do need to deploy $ into low risk securities but I am still making decisions. I will again use MAW130/MAW104 as I feel they are a great product for the MER that you pay.

Hope that was concise and not to opinionated - Long / Short MAW130 and evaluate the marker for a 60/40 balanced fund to be sure that allocation is acceptable for ya. Your VGRO is 80/20 and will be more volatile give our current markets.
 

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I consider my RESP to just be another part of my portfolio. When the kids were in University I did pay attention to some market timing but not much. The only part that did not work well was a BC goverment bond. The yield was great but the timing was not ideal. I was selling RBC and buying it in my taxable portfolio to maintain my overall allocation. The bond is due in December and I will not make that mistake again!
 

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Looking for suggestions as per above, for parents who have a 2yr old & just set up an RESP, who have zero interest in regularly monitoring and/or
tweaking the plan on any regular basis. VGRO.? other(s)?
Lets keep discussion yo suggestions for the plan...NOT the attitude of the parents. 馃お馃お馃お
I think you'd want to keep it as simple as possible, which definitely means some kind of balanced fund. Either a mutual or one of those all in one ETFs.

The only tricky part is considering how often contributions will be made, and how large. If it will be multiple small contributions then you need a mutual fund. The ETFs only make sense if there are few, large contributions, since each will likely have a $10 trade fee to buy more units.

Assuming mutual funds are preferred due to the size of contributions, I would go with Mawer Balanced, or BMO Monthly Income D Series and have recommended both to a friend with an RESP.

The Mawer minimum initial purchase is $5,000 but the BMO minimum is $500
 

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With COVID and the whole market being at all time highs and a majority companies have limited to no sales I struggle to accept current valuations and own no equities at all. So, currently our RESPS are cash - I do need to deploy $ into low risk securities but I am still making decisions.
I'm glad you posted this, because you're illustrating one of the problems with the so called "balanced" (60/40) approach. 60% is a lot in stocks, and people aren't always comfortable with that... as you proved. This makes it tough to hold for the long term.

In my opinion, balanced funds are too heavy in stocks for most people.

This is why I recommend, to anyone who will listen, only 30% weight in stocks as a long term commitment. My argument is that this makes it easier to tolerate and therefore minimizes the investment behaviour of selling when spooked.

That might mean VCNS is a better long term investment for you.

I know that I just recommended two balanced funds above, but that's because most people insist they can handle stock risk, and all the peer pressure from the pro-equity financial culture tells people to have at least 60% in stocks. I kind of stopped arguing with people.
 

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I'm glad you posted this, because you're illustrating one of the problems with the so called "balanced" (60/40) approach. 60% is a lot in stocks, and people aren't always comfortable with that... as you proved. This makes it tough to hold for the long term.

In my opinion, balanced funds are too heavy in stocks for most people.

This is why I recommend, to anyone who will listen, only 30% weight in stocks as a long term commitment. My argument is that this makes it easier to tolerate and therefore minimizes the investment behaviour of selling when spooked.

That might mean VCNS is a better long term investment for you.

I know that I just recommended two balanced funds above, but that's because most people insist they can handle stock risk, and all the peer pressure from the pro-equity financial culture tells people to have at least 60% in stocks. I kind of stopped arguing with people.
Have you comared VCNS vs VBAL charts over the last drop?
Think it would make a difference for a scared investor over that period?
 

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Have you comared VCNS vs VBAL charts over the last drop?
Think it would make a difference for a scared investor over that period?
I'll take a look now... here is a comparison of some measurements.

VBAL
-21% drawdown from peak
Year to date at worst point was -18%

VCNS
-18% drawdown from peak
Year to date at worst point was -15%

Not much of a difference. There might be some comfort knowing VCNS has less in stocks.

Then there's VCIP which is even more conservative:
-13% drawdown from peak
Year to date at worst point was -10%
 

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The ETFs only make sense if there are few, large contributions, since each will likely have a $10 trade fee to buy more units.
Or go to a place like questrade where ETF's are free to buy. VGRO or whatever you want. Could even set it up as a recurring bill payment but you'd have to log in to make the purchase.
 

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I'll take a look now... here is a comparison of some measurements.

VBAL
-21% drawdown from peak
Year to date at worst point was -18%

VCNS
-18% drawdown from peak
Year to date at worst point was -15%

Not much of a difference. There might be some comfort knowing VCNS has less in stocks.

Then there's VCIP which is even more conservative:
-13% drawdown from peak
Year to date at worst point was -10%
And MAW104 looks like ~17%.

Overall I don't think these did bad. If an investor would be scared enough to sell at those levels then they should probably keep their investments at arms length.
 

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Just for reference, I did ride the roller coaster down and back up. I did not sell at the bottom.....

I just don鈥檛 see a healthy market right now.....

I saw the fed provide massive liquidity and currently ongoing weekly maintenance. There has never been such a program in our history like this.

Markets are beyond fragile, and only being held up by the fed.

Rosenberg made a good point once, by waiting to deploy money until the storms are over and markets are mending, there is usually ~5% loss in performance & considerably lower risk.

鈥業鈥檒l buy that for a dollar鈥

For my fellow CMF鈥檙s, what movie is that quote from.... don鈥檛 look it up! Think about it !
 

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And MAW104 looks like ~17%.

Overall I don't think these did bad. If an investor would be scared enough to sell at those levels then they should probably keep their investments at arms length.
I agree actually. The balanced funds did their job and in the big scheme of things, these are not very bad drawdowns.

I think an investor who's in the market needs to get used to something like 20% or 30% drawdown. I haven't yet found any portfolio that can give good returns and which doesn't have at least 20% drawdowns sometimes.

Anyone in MAW104, VBAL, XBAL, etc should be pretty happy about how this has played out so far.
 

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Part of it depends on who is funding the RESP. If it is the parents and it is their RESP, then their risk tolerance needs to be considered. VBAL or VCNS would be about what I'd suggest until one knows whether they could accept VGRO. I'd recommend perhaps VBAL for now and let it play out a few years and see if an asset allocation adjustment might be justified. MAW104 is a viable alternative to VBAL but as James suggested, minimum initial purchase is $5k, and some brokerages such as RBC DI will not sell it to you.

If you are providing the funds for the RESP directly or indirectly, and the parents will never likely fund an RESP on their own, then the CESG room is really up to you to deal with as you wish. Be as aggressive as you wish at least until the kid is a teen.

Anecdote: I fund an RESP for a grandchild but the parents are also funding their own RESP, albeit in relatively small amounts due to financial constraints. So I work with them to decide how much they want to fund their RESP each year, and then I fund 'my' RESP with the remaining room from the annual $2500 allowance to get full CESG. In this case, I cannot justify front end loading the RESP because I am following the lead of the parents to make their funding decisions first. In addition, I would normally take VGRO type risk for my 2 year old grandchild, but I don't want to gamble too much on 'losing' CESG room that the parents themselves could use with their contributions. Thus I am sticking with a 60/40 asset allocation with everything in MAW104. It will likely be that way until the grandchild goes to post-secondary.
 

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VBAL has a lot in stocks. Not too bad now when your kid is only 2. But do you want 60% in stocks when they're 16 and university is just two or three years away?

How about a combo of XIC, XAW, and XBB?

You can do something like...

XBB: 50%
XAW: 45%
XIC: 5%

Then in a few years, when your kid is older, you can increase the exposure to bonds and decrease the exposure to stocks.

Just an idea. I'm not a financial advisor or expert.
 

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I will be buying XEQT for the next 13-15 years starting from later this year in my nephew's RESP account. After that, I will convert it to more safe investment.
 

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Looking for suggestions as per above, for parents who have a 2yr old & just set up an RESP, who have zero interest in regularly monitoring and/or
tweaking the plan on any regular basis. VGRO.? other(s)?
Lets keep discussion yo suggestions for the plan...NOT the attitude of the parents. 馃お馃お馃お
Well this is a very good question. As a parent we always wants to save money for our kids education. RESP is one the tool to save and grow money kids future.

Investing in a single stock always has sector risk and again it requires active monitoring
Investing in ETFS could be other choice but it is passively managed for Exchange.
As you said you have zero interest in regular monitoring. I would suggest you could invest in some good funds which are specifically designed for kids RESP. It could be mix of dividend,balance and growth .

However, I am taking a different approach for RESP investment. I am using a tool where I save Tax on my investment and on the same time investing money for Kids education as well as getting govt grant.
 
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