Investing

Investing Pension Money

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  • Oct 27th, 2019 11:07 pm
[OP]
Member
Jun 7, 2013
202 posts
99 upvotes
Toronto

Investing Pension Money

I have around $40,000 in a locked in pension. Was looking to buy 4 Mawer funds (each 25%)

Mawer International (Maw102)
Mawer Balanced (Maw104)
Mawer Cdn Equity (Maw106)
Mawer US Equity (Maw108)

Is this diversified enough? My investment time frame is 20+ years, and I have a high risk tolerance for investments. Any other suggestions? Thank you
7 replies
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May 11, 2014
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Why are you buying MAW 102, 106 and 108 when they are already in the Balanced fund?

In terms of diversified, sure it is diversified, but what exactly are you looking for?
When you are selecting different funds, you should try to make the funds complement each other.
Just because Mawer has good funds, doesn't mean selecting different Mawer funds and buying them together make for a good portfolio.
MAW104 is the balanced fund which contains Series O version of many different Mawer funds.
https://www.mawer.com/funds/explore-fun ... nced-fund/

Notice that it contains 17.6% MAW102, 13.6% MAW106 and 20.2% MAW108. Series O so it makes it somewhat cheaper to hold, but nevertheless you would be double-holding these funds. It isn't the worst in this case because holding these funds via MAW104 will likely be a bit cheaper. Your portfolio would end up with a portfolio having approximately 7.5% bonds/fixed income.

It would contain approx...

7.5% Canadian Bonds
0.5% International Bonds
30.1% US Equity
31.1% International Equity (including small caps)
29.2% Canadian Equity
1.5% Cash

It's diversified for sure, but there is a lot of overlap. You could set up the funds cutting out MAW104.

30% MAW108 US Equity
30% MAW106 Canadian Equity
25% MAW102 International Equity
7.5%MAW150 Global Small Cap
7.5% Vanguard Canadian Aggregate Bond ETF (MAW100 is not very competitive if you hold it as Series A)

Or if you OK holding more risk considering your long time frame, you could cut out bonds all together. Considering the portfolio above has 7.5%, there is very little fixed income anyway.
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Jan 16, 2009
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MAW104 is probably one of the best run mutual funds in the country. With an MER < 1% you could do a lot worse. I'd just buy and hold MAW104.
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jsn23 wrote: MAW104 is probably one of the best run mutual funds in the country. With an MER < 1% you could do a lot worse. I'd just buy and hold MAW104.
MAW104 is a great mutual fund, but it is a 60% equity/40%bond, cash, fixed income fund. This might be too conservative for the OP.
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[OP]
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Jun 7, 2013
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Toronto
Thanks for the help. I already bought 25% of Maw104, but will see if I can remove it. What do you think of 33% in each of US equity, Cdn equity and International equity? Or perhaps 25% across 4 funds including Maw150? Is it safe to keep all funds with Mawer? Or could that be diversified?
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ChipsAway wrote: Thanks for the help. I already bought 25% of Maw104, but will see if I can remove it. What do you think of 33% in each of US equity, Cdn equity and International equity? Or perhaps 25% across 4 funds including Maw150? Is it safe to keep all funds with Mawer? Or could that be diversified?
It's really upto you. But you should have thought this through before going ahead and buying MAW104. There is a 2% early trading fee if you have already bought it and only have held it for 90 days.
https://www.mawer.com/assets/Fund-Facts ... ries-A.pdf?
And keep in mind any transaction fees your brokerage may charge

If you are serious in that you have a high risk tolerance, any of those combinations are fine including your original plan. Just do keep in mind of your long term approach and how you want to step down the portfolio overtime. For example, one strategy is to set your setting to receive distributions in cash and to start using this cash to buy some units of bond funds to slowly step down your risk overtime.

Going with your plan that Includes the global small cap would be the most aggressive.
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Is the fascination with Mawer because they are truly good active managers, or is it just that they're one of the few well-known fund company that offers their funds with MERs that don't include full 1% advisor commissions?
Money Smarts Blog wrote: I agree with the previous posters, especially Thalo. {And} Thalo's advice is spot on.
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Thalo wrote: Is the fascination with Mawer because they are truly good active managers, or is it just that they're one of the few well-known fund company that offers their funds with MERs that don't include full 1% advisor commissions?
Looking at their funds, they have done fairly well and are fairly consistently in the top quartile of their fund classes according to Morningstar. fundata.com also shows Mawer funds to perform well compared to other funds in their class. That being said, there are many funds that are being ignored as well. Many companies from Fidelity, PH&N,Greystone, CI, Mackenzie even some big bank funds from RBC, TD etc. have also fairly well. Others like Steadyhand are decent and are fairly priced, although performance isn't as good compared to Mawer, while some of their funds are just lousy. I think it is because Mawer in general has a good set of funds, all reasonably priced which aren't buried among many is why the brand does well. That being said, MAW100 Mawer Canadian Bond Series A is average performing. I find searching for well-priced, well-managed funds difficult to do without doing thorough searches on fund websites and many places have such vast number of portfolios which make it difficult to pinpoint good funds to choose from.
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