Investment Q&A

Q: We just recently were switched from a fund we had been invested since 2002 into this fund in one our RIF accounts, we had to switch or sell. The reason given was to lower the MER which is still a hefty 1.2% in our case the amounts to $1090.92 per year and rising if the fund goes up in value as we have always reinvested the monthly income the current yield is 2.09%.
The fund has been in a trading range since inception from the information I can gather at TD.
My thought is to sell and distribute the money to the either the Conservative or Balanced ETF portfolios in the newsletter which both have higher yields.
I'm not sure what the total MER would be for the ETF portfolios do you have that number available?
Downside is it would double the number of investments in this account to many to follow.
Do you know of other one stop ETF's that are worth consideration as we would like to keep the funds in a balanced investment, we would not intend to use this money for 5 yrs and reinvest any income in the fund.

Q: Hi

My question is about structuring and managing a portfolio across multiple registered and unregistered accounts. Please forgive if this question has been asked before.

Between 4 family members (including two young children) we have 11 trading accounts on the go, including 5 unregistered (3 Cdn and 2 US), 2 tfsa’s, 2 rrsp’s, and 2 resp’s. My approach to date has generally been to try to diversify within each account and try not to duplicate between accounts, with an eye to overall diversification.

This results in three problems (at least): sub-optimal diversification within and across accounts, too many holdings (which are difficult to monitor) and a low average $ value per holding. For example, 11 accounts times ten positions per account is 110 holdings. As for low value, a 10% holding on a $50,000 registered account is $5,000, which represents only 0.5% of an aggregate $1,000,000 value (example).

I have been thinking of treating all of the accounts holistically rather than individually while accounting for tax considerations of course. My goal is to try to get the number of holdings down to 20 - 30, with an average value of 3% - 5% of aggregate portfolio value. I find the main difficulty to be in structuring the lower value accounts.

Two approaches I have been mulling over:

1) Scrap the individual account diversification approach and perhaps only hold 1 - 3 positions in lower value accounts. This approach would probably mean that no account on its own will be diversified but the aggregate portfolio will be (hopefully).
2) Try to maintain the account diversification approach by investing in only one etf per account until the account eventually reaches a size sufficient to hold more positions (then I suppose the approach would flip to the first approach). The idea being that each account would hold a different etf (and at least be somewhat diversified) that would contribute to the overall diversification of the aggregate portfolio.

Do you have any comments or guidance on managing multiple accounts? How do investment professionals manage their own family accounts? Any best practices that you are aware of, or good articles that you can direct me to? Any considerations besides tax; for example, how do you apportion risk between family members and accounts?

Thanks
Derek

Q: What is the best all in one etf for Canada, us,and global? Thanks larry

Q: Hi Team,
I am putting a note on my personal file for my wife in case I ever become unable to manage our household portfolio. Inspired by Buffet, I thought having 3 years of cash and the rest of the portfolio in something like VCNS, re-balancing annually, would offer a diversified and conservative portfolio that would be very easy to manage and meet ongoing needs.

One of your recent answers suggested not exceeding, I believe, 25% in any one ETF or fund. If I were to follow that rule, I would need to come up with the equivalent of VCNS in a few funds.

Would it make sense to simply tell my wife that instead of buying only VCNS, buy all the constituent ETFs held by VCNS, in the same proportions held by VCNS, and rebalancing annually?

That would mean holding the following:
AB.TO Vanguard Canadian Aggregate Bond ETF 35.74%
VUN.TO Vanguard US Total Market ETF 15.45%
VBG.TO Vanguard Global ex-US Aggt Bd ETF CAD-H 14.00%
VCN.TO Vanguard FTSE Canada All Cap ETF 11.91%
VBU.TO Vanguard US Aggregate Bond ETF CAD-H 10.94%
VIU.TO Vanguard FTSE Dev AC ex Nrth Amer ETF 9.08%
VEE.TO Vanguard FTSE Emerging Mkts All Cap ETF 2.87%

Can you think of a simpler way to go here?

Thank you very much. Michael

Q: I am currently researching the Vanguard Conservative ETF Portfolio. I would like to confirm that I understand the total fees properly.

The Vanguard website indicates that the MER for this product is 0.25%, and "For any Vanguard fund which invests in underlying Vanguard fund(s), there shall be no duplication of management fees chargeable in connection with the Vanguard fund and its investment in the Vanguard fund(s)."

VCNS holds a portfolio of other Vanguard ETFs. I interpret the above paragraph to mean that the total fees paid to Vanguard is 0.25% (ie. that there is no stacking, that I do not pay the separate MERs for the underlying portfolio ETFs, PLUS an additional 0.25% for the VCNS ETF). Can you please confirm that my understanding is correct?

Thank you for your help and your insightful advice.

Q: Recently a number of firms, including iShares, Templeton, BMO and Vanguard, have come out with asset allocation ETFs. These ETFs appear to be well diversified both geographically and sectorally. You can purchase these ETFs with various bond/equity ratios depending on your risk tolerance. What is your view about these ETFs? Would it make sense for a conservative, retired, investor to purchase one of these ETFs as their entire investment (and to sell their individual equities)? If you like these asset allocation ETFs, which one do you think is best for an RRSP, TFSA and a non-registered account?

Thank-you again for your excellent advice.

Q: HI,
Are there any tax consequences keeping these in TFSA account.

Thanks,
Milan

Q: What are your thoughts on these low mer Vanguard etfs?
Thnx

Q: Following up on Maureen's question about regional allocation - if you looked at Canada 40% US 35% Europe 15% and Emerging Markets 10% could you give me some suggestions as to which ETF's you might suggest I look at to achieve such a distribution.
Thanks,Terry

Q: Are there any similar funds to this. ? I have 800.000 to invest. Is it safe to invest it all in one fund? Minimum 4 years to retirement. age 67.

Q: I am 65 and retired with about $150,000 invested in the Mawer Balanced Fund for the long term. I redeem about $700 each month to supplement my company pension. Is this a good vehicle for the purpose Or is something else more suitable?

Q: Would you recommend either of these for a lazy TFSA investor? Thanks. Peter

Q: Any thoughts on these new ETF investment options? Thanks. Peter
VCNS,VBAL,VGRO