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Help with Couch Potato portfolio with RBC

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  • Aug 18th, 2015 6:04 pm
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Deal Fanatic
May 22, 2003
9325 posts
6386 upvotes
Vancouver

Help with Couch Potato portfolio with RBC

Opening up a new investment account with RBC and using the couch potato method. Need a little advice on which MF I should be buying.

My intended allocation 40% bond, 20% Canadian Equity, 20% US Equity, 20% International Equity


So 20% RBF556 (Canada Index fund)
20% RBF 557 (US Index Fund)
20% RBF559 (International Index Currency Neutral Fund) - this is the only international index fund I think they offer

for the 40% bonds, I'm unsure which fund I should be picking? I'm thinking RBF1005 (Series D Bond Fund) but it seems they invest primarily in Canadian government bonds. Should I be picking something with more corporate/global exposure? (e.g. RBF 267 - Series D Global Bond Fund or RBF1095 - Series D Monthly Bond Income Fund) Thanks in advance!
16 replies
Deal Expert
Feb 29, 2008
30106 posts
5547 upvotes
Montreal
I would get:

rbf556 for canadian

tdb661 for US

nbc839 international

rbf563 for bonds
Deal Addict
Sep 5, 2010
2352 posts
382 upvotes
Toronto
I already have RBF556, RBF557, and for the bond, I have the Canadian Bond Fund (RBF270) and that is the one you probably need.

I don't have an international fund but I will get one soon.
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Deal Fanatic
May 22, 2003
9325 posts
6386 upvotes
Vancouver
mr_raider wrote: I would get:

rbf556 for canadian

tdb661 for US

nbc839 international

rbf563 for bonds
I've tried to buy TD E-funds under my RBC DI account, but can't seem to pull them up?
Deal Fanatic
May 22, 2003
9325 posts
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Vancouver
Woodbridge905 wrote: I already have RBF556, RBF557, and for the bond, I have the Canadian Bond Fund (RBF270) and that is the one you probably need.

I don't have an international fund but I will get one soon.
Thanks for the info, RBC 1005 is the same as RBF270, just class D series so slightly lower MER
Deal Fanatic
Mar 24, 2008
6278 posts
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Toronto
Jermyzy wrote: I've tried to buy TD E-funds under my RBC DI account, but can't seem to pull them up?
You can't buy TD e-series funds outside of TD investments or TD Direct Investing.
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Deal Fanatic
May 22, 2003
9325 posts
6386 upvotes
Vancouver
Sorry guys, one more question. For international equity:

RBF 559 International Index Currency neutral Fund 0.71% MER

or

RBF 1031 International Equity Fund C$ 1.25% MER

The index fund has lower MER but most articles I read say that currency neutral funds end up costing 0.5% more anyways due to hedging...which of these two would you pick?

Edit: this is held in a NON-REGISTERED account. From what I read, the currency neutral fund trades in derivatives. Which can be bad or good..but the international equity fund holds the stocks directly so I can claim withholding tax more easily...this is very confusing...maybe I should talk to an advisor lol

http://canadiancouchpotato.com/2011/07/ ... rivatives/
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User avatar
Dec 26, 2010
1736 posts
776 upvotes
Calgary
Just go with the cheapest one and call it a day. It's not 'ideal', but you're not going to end up much better either way. At these MERs, I'd suggest just putting your money into the Tangerine Balance Growth fund and call it a night.
Indexer, non-yield chasing, low cost, broad based, as simple as possible investor.
Deal Expert
Feb 29, 2008
30106 posts
5547 upvotes
Montreal
Jermyzy wrote: I've tried to buy TD E-funds under my RBC DI account, but can't seem to pull them up?
All the funds I listed are purchasable via any brokerage.
Jr. Member
Sep 23, 2014
192 posts
186 upvotes
Ottawa, ON
This is the list of mutual funds I had in my Couch Potato portfolio before switching to ETFs (these used to be on CCP's website about a year ago as the recommended non e-series mutual funds):

RBF556 RBC Canadian Index
TDB661 TD US Index
NBC839 National Bank International Index Fund
TDB966 TD Canadian Bond Index
Deal Fanatic
May 22, 2003
9325 posts
6386 upvotes
Vancouver
Thanks for all the help guys, after doing a little more research I think will go ETF route since this is in a non-registered account. (Mutual funds automatically re-invest payouts)
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User avatar
Dec 26, 2010
1736 posts
776 upvotes
Calgary
For ETFs, the best (tax wise) are HXT (TSX60) and HXS (S&P500). Mutual funds don't automatically re-invest distributions. You choose whether it happens or not.
Indexer, non-yield chasing, low cost, broad based, as simple as possible investor.
Jr. Member
Mar 2, 2015
101 posts
28 upvotes
Toronto, ON
wm009 wrote: For ETFs, the best (tax wise) are HXT (TSX60) and HXS (S&P500). Mutual funds don't automatically re-invest distributions. You choose whether it happens or not.
For ETFs on RBC Direct Investing I use RBO, RCD, RID, RUD. They are on DRIP list and re-invested every month. Vanguard ETFs are cheaper but no drip.
Deal Expert
User avatar
Oct 26, 2003
39339 posts
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Winnipeg
how is your canadian index fund performing? seems to suck for me these days
Deal Expert
Feb 29, 2008
30106 posts
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Montreal
divx wrote: how is your canadian index fund performing? seems to suck for me these days
Yup. Thank God it did well for 7 years before.
Deal Fanatic
May 22, 2003
9325 posts
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Vancouver
wm009 wrote: For ETFs, the best (tax wise) are HXT (TSX60) and HXS (S&P500). Mutual funds don't automatically re-invest distributions. You choose whether it happens or not.
Thanks, I was looking into these two plus HBB (Bond ETF). I'm wondering if the tax benefits are worth the risks with a swap-based ETF.
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User avatar
Dec 26, 2010
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Calgary
Jermyzy wrote: Thanks, I was looking into these two plus HBB (Bond ETF). I'm wondering if the tax benefits are worth the risks with a swap-based ETF.
The swap risk really isn't much risk. The bigger risk is the government and if it changes laws regarding how they're taxed, which is a future guessing thing.

They are sweet products though. I have a 65% gain on HXS and never paid a penny of tax on useless dividends I would just reinvest anyway.

I may eventually move money into HBB and put my TFSA (which partially holds VAB) to use with something with more earning power (bonds having a flat outlook). But alas, I'm lazy and try to not jump too quickly on changes to my portfolio.
Indexer, non-yield chasing, low cost, broad based, as simple as possible investor.

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