TD e-series managed funds

6244 Views 6 Replies 6 Participants Last post by John_Michaels, Dec 14, 2009

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Discussion Starter · Dec 11, 2009

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?

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PMREdmonton

· #6 · Dec 14, 2009

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.

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