Investment Q&A

Q: Good morning,
A general question regarding etf's versus mutual funds. It is commonly accepted that except for rare occassions it is better to own etf's as oppossed to mutual funds. This because of the high mer's and relatively poor performance of mutual funds. In checking this thesis out for a friend,though, i find that his funds see. To have vastly outperformed the tsx. In the case i am showing you it is Franklin Bisset Canadian Equity. I checked it out on Morningstar. Am i missing something here? I imagine it is because the mer fee comes around every year and even though the fund beats the index over say a five year or ten year period, those fees dig deep. Having trouble understanding how you would calculate this.
Thanks claire

1 Yr 3 Yr * 5 Yr * 10 Yr *
Growth of 10,000 9,495 10,463 9,564 12,900 14,032 16,826
Fund -5.05 4.63 -4.36 8.86 7.01 5.34
+/- S&P/TSX Composite TR -0.78 2.03 -2.18 2.37 2.83 -0.11
+/- Category -2.28 0.98 -3.51 0.78 2.09 0.69
% Rank in Cat 77 30 86 40 17 26
# of Funds in Cat 427 476 425 308 228 97
* Annualized returns.
Data as of 04/11/2015. Currency is displayed in CAD.

Q: I am a retired, mostly conservative dividend-income investor with a pension, CPP and annuities. My asset mix is 65% equities and 35% fixed income. My holdings include AD, ALA, AQN, BNS, BCE, CGX, CPG, PBH, RY, SLF, WCP, WEF, WSP, ZLB, XIT and Sentry Cdn Income, Sentry REIT, TD Health, RBC Cdn Equity Income.

Within my equity portfolio, my tech exposure is 8% with 3/4 of that being XIT. Seasonality is in its favor right now.

Within my equity portfolio, my healthcare exposure is 4%, with 3/4 of that being TD Health. Bad current news environment and bad seasonality, but beaten down.

I am interested in topping up either XIT or TDB976. Which one is more conservative, could use the topping up and has the most upside?

Thanks,
Steve

Q: I am down somewhat on this Bond fund ... should I bail and try to recover some losses on a forecasted year end surge.Thanks as always.

Q: Can you please explain what the difference is between the Mawer Balanced (104) and the Mawer Balanced Tax Effective (105) and if one would be more suited to a registered vs non registered account. Thank you.

Q: My advisor recommended Fidelity Northstar Fund for some international exposure in my RSP account. Although it does not distribute a dividend, it has shown good growth for 5 (17.19%) and 10 (8.55%) years. I am not sure if you have to hold it for a minimum period of time. Your thoughts please. I am not sure if the net costs to me are worthy of holding this fund in my RSP and I also wonder if you advise foreign content in a CDN RSP

Q: I would suggest that Canoe got the better of this deal.Your comments please

Q: Doing a bit of portfolio clean up, what would be your recommendation (keep, replace with) regarding the following mutual funds in a well diversified portfolio. They represent about 8% of the portfolio.
DYN435 up 40%, DYN9405 up 18%, TML1013 down 6.5%, TML 1018 up 12%, AIM1651 up 9%
Please deduct credits as necessary.Thank you.
Carlos

Q: Good Morning,
I hold many of the stocks in the 5i Model Equity Portfolio. I would like to diversify my holdings beyond Canada so was thinking of starting a position in MAW150. It has performed well over the past couple of years. What do you think of this fund going forward? Are there others of this genre that you would recommend instead?
Thanks for all your help.

Q: I am a proxy for a friends account, his advisor was charging him 1 per cent, but in the account were some stocks and 2 mutual funds with a fee of between 1.5 and 2.5 per cent on top of the 1 per cent of money under management not to mention maybe a trailer fee for putting the money in the fund. since you are independent what do you think of this practice and how pervasive is it.dave

Q: I have two REP funds for my granddaughters (1&3years). Looking for a long term balanced fund in the investors group. What would you suggest?

Q: In the Globe on Fri., July 17 a writer was commenting on the Orange Balanced Growth Fund & seemed to like its low mer of 1.07%,its diversification with 25% of the fund in Cdn. stocks, 25% in Cdn. bonds, 25% in Us stocks & 25% in international stocks. Is this good for a young person with a 25+ year horizon or would it be better for an older couple with a TFSA. Both the young person & the older couple know very little about the investment world.Thanks as always.

Q: Hello Peter, Saw your recent column on mutual funds. Would you list a few that meet your recommendations? Thanks, Lavern

Q: Hi team,

You indicated that in the TFSA, there will be a 15% withholding tax on dividends. How does that play if it is a mutual fund (in U.S.$) held in the TFSA ? What are the pros and the cons of holding such a mutual fund in a TFSA ?

Thanks a million,

Jacques

Q: Hello Peter
I am not sure i should be asking you this question or i should ask the Mawer Funds Company ?
I would like to purchase the Maw150 fund in the future but not sure if they would be closing this fund to new investor .What are some reason they close funds or cap them ?Do you think they would consider closing this Maw150 in the future say in two years what would be your opinion ? I currently have many of the stocks in your Balance and Growth portfolio and i am doing very well .Thank you so much !!
Thanks
Claudio

Q: Further to Peter's article in the Financial Post on June 19, 2015, "5 Things To Look For When Buying A Mutual Fund", he referenced buying a fund whose managers are not allowed to personally own stocks. He also mentioned performance during past tough years. Can you narrow down a fund or fund family that he would identify meeting the criteria. Thanks.

Q: Hi Peter, Please clarify: In your response to Phil question today about Mawer funds, you say MAW 150 fees are 1.5%. The fund shows MER @ 1.82% and 1.5% Management fees, which is included in the MER, right? So the investor gets charged 1.82%, right?

With MAW 120, MER is 1.41%, and management fee is 1.15%. Investor gets charged 1.41%, right?

Thank you!

Silvia

Q: Peter and Team:
I am fairly well diversified in the North American markets, but feel I need more International exposure. You have spoken highly of Mawer Funds in the past (knowing you are not big fans of MF's), and I was wondering if you could provide an opinion on MAW150 and MAW120 as a way of achieving this exposure. Are there ETF's that might be better? Are there any tax differences between international etfs vs MF's if they both trade on the TSX? Also if going with a mutual fund is there any advantage through buying through the fund vs through my discount brokerage? Please dock a couple of question credits for this one to be fair.

Thanks as always.

Phil

Q: Good morning. Unfortunately, I have a large part of my holdings locked into a company RRSP program. There are decent, not great, mutual funds to choose from. I have about 18 years to retirement and am almost 100% in equities. What would your rough advice be for %-age in large cap dividend, midcap, and small cap be? With funds it is tough to get as low a weighting in financials and materials as you recommend. Amy suggestions? Thanks, as always for your excellent service!

Q: At times we want to take money off the field of play and sit it on the sidelines for any number of reasons. I have used money market funds for this purpose in the past. I have been reading that these are not guaranteed even though most people think of them that way. Please give us your take on this and any alternate suggestions for short term sideline holdings. Thank you.

Q: Do you have any information about either of these funds?Thanks Paul.