Investing

Mutual fund selection from a work plan

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  • Feb 7th, 2021 2:04 pm
[OP]
Newbie
Dec 28, 2008
64 posts

Mutual fund selection from a work plan

Hi there!

I don’t know whether to post in another thread or make my own so here goes! Let me know if there is a better place for this question and I will go there instead.

My hubby has an RRSP plan through work. They have funds to choose from and will match half of his contributions up to a certain amount. He has some index funds through Tangerine currently. I like index funds and have mine through TD. We probably have about 20 years so we want to invest it aggressively. My allocation is split evenly between Canadian Bonds, Canadian Equities, US Equities and International Equities.

Would it be better to pick from the fund portfolios? Or the individual class ones?

The portfolios are offered by PSG (GWL).

The Canadian Equities are Beutel, Goodman or Jarlislowsky Fraser.

The Canadian Bond is Portico.

The US Equities is Jarislowsky Fraser.

The Global Equities is Invesco or Setana.

The International Equities are Jarislowsky Fraser.

There are also balanced funds, cash and equivalent funds, a CDN small cap fund, commercial mortgage fund, emerging markets fund, precious metals funds and a real estate fund to name a few.

It’s very overwhelming. I like the index investing I have done and it has done well for me. His Tangerine fund is similar to my asset allocation and is doing ok too.

Any input or experience with any of these products would be appreciated.

Thanks for your time!
23 replies
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Feb 19, 2004
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Make sure to check the MER.
Some mutual funds have really high MER.
insert witty comment
[OP]
Newbie
Dec 28, 2008
64 posts
Yeah I had a look. They aren’t as good as the TD e series but the funds aren’t too bad. Thanks for the input.
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Feb 1, 2012
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You did not mention index funds, but if the plan does offer them, it would be a logical choice since it would match your existing strategy. It sounds like you don't want to spend much time on this. If that's so take a look at the balanced funds, how diversified they are and what the fees are. That would be the simplest choice. Otherwise maybe just pick individual funds, one each for bonds, Canada, US and international. Put whatever amount in bonds you feel comfortable with, then split the rest equally among Canada, US and International. That's typical of recommended couch potato profiles. You mentioned an international fund and a global fund. What's the difference? I'm guessing the global fund includes Canada and the international fund excludes Canada. If that's the case check what % the global fund holds in Canada. It might be low. like 4% since that's about what Canada's portion if the world equity market is.

The main thing you should do is make sure that your total investment portfolio is aligned with your desired asset allocation across all your accounts. Also if there is a company matching contribution, try to contribute up to at least the maximum that the company will also contribute, since it's free money.

This page describes portfolio design. Maybe a bit deeper than you want, but it's very well written:
Finiki: Portfolio design and construction
I solemnly swear, to never assume I have an inkling at which direction the market will head, and to never make any investments based on a timing strategy.
Sr. Member
Jul 16, 2019
626 posts
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Do they not have 'date' funds ? i.e. funds you pick with your projected date of retirement. For example you pick a fund with a 2035 date if that's when you plan to retire and the 2035 fund is setup to generate max growth by that date, most passive investment. So you pick one or two of these and a couple more from index and good to go. Sunlife has these funds.
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May 11, 2014
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ljones20 wrote: Hi there!

I don’t know whether to post in another thread or make my own so here goes! Let me know if there is a better place for this question and I will go there instead.

My hubby has an RRSP plan through work. They have funds to choose from and will match half of his contributions up to a certain amount. He has some index funds through Tangerine currently. I like index funds and have mine through TD. We probably have about 20 years so we want to invest it aggressively. My allocation is split evenly between Canadian Bonds, Canadian Equities, US Equities and International Equities.

Would it be better to pick from the fund portfolios? Or the individual class ones?

The portfolios are offered by PSG (GWL).

The Canadian Equities are Beutel, Goodman or Jarlislowsky Fraser.

The Canadian Bond is Portico.

The US Equities is Jarislowsky Fraser.

The Global Equities is Invesco or Setana.

The International Equities are Jarislowsky Fraser.

There are also balanced funds, cash and equivalent funds, a CDN small cap fund, commercial mortgage fund, emerging markets fund, precious metals funds and a real estate fund to name a few.

It’s very overwhelming. I like the index investing I have done and it has done well for me. His Tangerine fund is similar to my asset allocation and is doing ok too.

Any input or experience with any of these products would be appreciated.

Thanks for your time!
Could you list the entire name of the fund? All of these are just the name of the company and depending on the type can have multiple types within each. If yo list the full names and MERs, this makes it easier to actually compare. Some of these funds can be competitive active funds and if the MER fees are somewhat reasonable will be good long term options.

As an example GWL Canadian Equity Fund (Jarislowsky Fraser) is an active Canadian Equity fund. This is an old fact sheet, but take a look
https://www.canadalife.com/content/dam/ ... s/S232.pdf

If you look at the returns it posts, you will notice that the fund is beating the index almost every year, in some cases beating it by 4,6 or almost 10%. The thing with these segregated funds are that the MER is not quoted in these documents because they depend on the contract being signed. If you were to get a segregated fund on our own, you would look at easily 3-4%MER. In pension plans, the MERs are generally much lower but again depending on how much your employer decided to subsidize them, can be vary significantly. So again we need to know the MER before we can really take a look.
Last edited by xgbsSS on Feb 4th, 2021 5:27 pm, edited 1 time in total.
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Deal Addict
May 17, 2012
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These group plans are typically very conservative by nature.

for the CDN side; I see you mentioned Beutel Goodman, they have an excellent track record and that is who i would go with
for the US side; see if there is an index fund that basically tracks the index with a low MER. I have not found a US actively managed fund that is consistently better than the index.

I'm not a fan of any of the JF funds.. Have JF US equity in my work plan and it has lagged although holdings suggest it has much more limited downside in a contraction (ie. it is a 'safe' fun)

Who is the small-cap fund managed by?

Who
[OP]
Newbie
Dec 28, 2008
64 posts
Thanks for the response. I do want to put a bit of work into it but there are a lot of funds in the list and I just wanted a bit of a Cole’s Notes version to start. Thanks for your comments. I have added them to my notes and will have a look at the article. As a general rule I was leaning towards the funds as opposed to the portfolio ones. I wondered if there was a market I was missing that I should check out too. I also wanted to be sure there wasn’t something I was missing. I have a little knowledge in this field but I’m not even close to an expert Face With Tears Of Joy
[OP]
Newbie
Dec 28, 2008
64 posts
I’m not positive of when I will retire but I suspect it will be later than 65 so I figured I would manage it myself for now.
Last edited by ljones20 on Feb 5th, 2021 10:21 am, edited 1 time in total.
[OP]
Newbie
Dec 28, 2008
64 posts
I will try to add photos of the lists. Can I not comment on each response so they can be seen together? Sorry guys!
Last edited by ljones20 on Feb 5th, 2021 10:22 am, edited 1 time in total.
[OP]
Newbie
Dec 28, 2008
64 posts
Which index does the US one follow? The small cap is managed by Renaissance.
Member
May 28, 2012
396 posts
342 upvotes
ONT
manixc wrote: Make sure to check the MER.
Some mutual funds have really high MER.
Yes, but also check the returns. This is my favourite fund, has a 5 star Morningstar rating but has 4.56% MER. I am not complaining.
CALENDAR RETURNS (%) As at 12/31/20

2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
62.3 32.6 23.1 30.7 -14.3 26.7 11.2 48.6 0.7 5.6
Deal Fanatic
Apr 11, 2006
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manixc wrote: Make sure to check the MER.
Some mutual funds have really high MER.
Not saying it shouldn't be a factor, but ultimately, the annualized returns matter, which already reflects the MER.
Deal Fanatic
Apr 11, 2006
8762 posts
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OP, since this is long term, I say go with the most aggressive/volatile one that has more growth potential.

Usually, work plans allow one free transfer out annually, so your husband can always opt for something stable that's low risk and very low growth and transfer out at year end to whatever you guys like to invest it in as a alternate option.
Member
May 28, 2012
396 posts
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ONT
ljones20 wrote: Nice returns! What fund is this?
https://funds.dynamic.ca/fundprofiles/en-US/PW2K/A/CAD BTW, I'm not the only one in this fund, it has $3.1 Billion assets. 2008 was bad but just about everything else that year was bad! The fund has had 4 losing years out of 22 years since it started.

There is also a "currency neutral" version that takes out the US$/CAN$ fluctuations: https://funds.dynamic.ca/fundprofiles/en-US/PW2K/N/CAD
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Jun 11, 2001
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I think 3 main questions are... What is your time frame, what is your risk threshold, what is the most effecient MER for the choices.

For me... I'm not touching mine for another 20 yrs minimum and the highest growth sector is US. I had a few options and split 50/50 between. Large cap US equities and small cap US equities. That's it, 2 funds, 50% each done.
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I looked at what you posted, I (Yes in my situation) would put 100% in to the US Equity Fund you posted. USEJF
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kenchau wrote: Not saying it shouldn't be a factor, but ultimately, the annualized returns matter, which already reflects the MER.
Very true. That being said, MERs can affect good mutual funds. Often these managers are really good at what they do. A lot of these segregated funds actually do very well.

Example is Fiera Capital US Equity.
https://www.fieracapital.com/en/institu ... /us-equity

Performance beats the S&P500 usually by 1-4% a year, although there are some years it is off. The problem with this fund is that it is normally sold as a segregated fund through insurance companies. The performance numbers here is before any MER is applied. Insurance companies are charging 3-4% on top of this, often negating any outperformance and then some. That being said, if there is a work plan offering it at a low MER (say 0.5-1.0% which I have seen), then it gets interesting.
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