Canadian Money Forum banner

1 - 7 of 7 Posts

·
Registered
Joined
·
6 Posts
Discussion Starter #1
I’m interested in an indexing approach by using the TD e-series funds for a portion of my RSP. I have looked at purchasing iShares ETFs within a discount brokerage. However, as I don’t have a lot of money in the RSP; and as I’m planning on contributing small amounts monthly, I think TD e-series funds is the most cost-effective approach now.

As my horizon is very long-term (30 years+), I can have an aggressive mix. I’m thinking about splitting the money in thirds (and rebalance when needed) across Canadian Equity (MER 0.31), US Equity (MER 0.33) and International Equity (MER 0.44).

However, I also saw that TD have e-series managed funds (e.g., TD Managed Index Maximum Equity Growth with MER of 1.37%); which seems to be similar to my proposed mix.

Wondering if I should stick with the split of three, or pay the higher MER for one simple fund that is balanced automatically. In other words, are the e-series managed funds worth it? Opinions?
 

·
Registered
Joined
·
7,253 Posts
However, I also saw that TD have e-series managed funds (e.g., TD Managed Index Maximum Equity Growth with MER of 1.37%); which seems to be similar to my proposed mix.

Wondering if I should stick with the split of three, or pay the higher MER for one simple fund that is balanced automatically. In other words, are the e-series managed funds worth it?
No, in my opinion.
The fees are a full 1% more than eSeries.
Manual balancing costs you no fees and very little time (if you do once a year or twice a year).
If you wish to change the allocation % between the 3 funds, you can do it easily and without fees.
Why would you bog yourself down into another "managed" fund and defeat the purpose of passive indexing?
The only time you'll incur fees with eSeries is if you sell your position within 90 days of buying (check exact number of days on their website).
 

·
Registered
Joined
·
3,197 Posts
The ING Streetwise Portfolios are a similar idea to the TD e-series managed funds, with an MER of only 0.8%. If you want the convenience of a portfolio fund, you could look at them to see if they have one that meets your desired asset allocation. The Steetwise Balanced Growth Fund is 25% Bond Index/25% CDN Index/25% US index/25% Int. Index
 

·
Registered
Joined
·
105 Posts
Stick with the basic funds, not a fund of funds. There are no transaction fees with the e-Series, which means that you can easily rebalance yourself every year. There is no need to pay extra fees for a "managed" portfolio. The lower MERs on the funds you suggest should provide healthy returns over the long run. The preauthorized purchase plans with a $25 minimum are also quite excellent.
 

·
Registered
Joined
·
3,197 Posts
Further to my first comment, you aren't likely to find any portfolio fund that is 100% equity. And I agree that re-balancing once a year is not hard, particularly if you are making regular contributions anyway. So unless you have some strong reasons for wanting a hands-off portfolio, I would recommend you manage your own as well.
 

·
Registered
Joined
·
759 Posts
You are better off sticking with the e-series index funds.

I would suggest you hold at least a portion of your portfolio in bonds, especially at this point in time when stock returns in the medium term don't look great and there is still likely considerable risk of a very protracted double-dip recession and another stock market crash.

I would suggest you at least take a 25% stake in fixed income. TD has an e-series Canadian bond index fund that you can use.
 

·
Registered
Joined
·
104 Posts
I've done the same for my wife's RRSP & non-RRSP portfolio. That is, invested across the three e-series, Canadian, U.S. & Index. She has a number of GICs outside these and thus I'm not too concerned with the fixed income funds. My main reason for choosing the e-series were low MER and $0 purchase price as the monthly amounts don't warrant paying trading fees.

A fund of funds? eh..duplication and higher MER.
 
1 - 7 of 7 Posts
Top