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Thread: RBC Monthly Income Fund?

  1. #11
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    Not directly comparable (I agree) but are they that far off? I wonder how much the allocation of those funds deviates from 50/50

    I'm impressed that those monthly income funds are showing higher performance in the 15 year comparison. It's probably worthwhile delving into what exactly they are doing that has produced that higher performance. Maybe it's simply higher fixed income exposure?


  2. #12
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    RBC Monthly Income stays pretty close to 50/50.

    TD Monthly income is tilted towards more equity: closer to 40/60. It's long-term returns have been a little better than RBC's, but can be accounted for by the different asset allocation. It's MER is higher.

    But both are good Canadian Neutral Balanced funds for a conservative investor who doesn't want to actively manage a portfolio.

    RBC Monthly Income is no longer available for registered accounts. But you can emulate its performance pretty well with a 50/50 split of RBC Bond Index and RBC Dividend Fund.

    What irks me about RBC Monthly Income, is that no matter how big your account is, RBC retail branches will only offer the Series A at MER 1.20 (which is actually pretty low for a managed fund). If you want the Series D with an MER of 0.88, you have to go to RBC Direct Investing or some other brokerage source. (And its subsidiary PH&N will not sell it to you either.)

  3. #13
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    Aha, so maybe the key difference in the asset allocation is that these are heavier in banks and financials (as RBC Dividend Fund is).

    That would certainly explain the performance boost, as banks have done unusually well in Canada

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  5. #14
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    Q to gurus:

    i'm being lazy, i haven't laid eyes on the prospectuses, i know i know, this is despicable ...

    but may i ask if anyone has noticed which of these funds - if any - might be selling options?

    provisions to allow the same will be spelled out in the prospectuses. I've noticed that many funds do *not* show option positions in their financial statements, even though these exist if only intermittently.

    if anyone has noticed it would be nice to hear. Thankx.

  6. #15
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    Hi humble, good question. I don't know about these particular funds.

    Financial statements capture a snapshot, so who knows what happens in between those balance sheets. They may have options or forex positions on Nov 1, but close them before the statements are produced in December. You'd never know!

  7. #16
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    Is it worth switching from the RBC Monthly Income Fund to the Mawer Balanced Fund (MAW 104)? Is the latter available through CIBC Investors Edge discount brokerage?

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    You can buy all open Mawer funds thru Investors Edge

  9. #18
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    Quote Originally Posted by james4beach View Post
    Hi humble, good question. I don't know about these particular funds.

    Financial statements capture a snapshot, so who knows what happens in between those balance sheets. They may have options or forex positions on Nov 1, but close them before the statements are produced in December. You'd never know!

    one sort of knows by reading the prospectus. If it says the fund can invest in options, or short positions, or other derivatives, then i usually conclude that the same are part & parcel of a fund's operation, even though the financial statements don't show derivative positions.

    james a modest proposal. A lot of these income funds are tarting up their returns with derivative trading, etc. Somewhere in cmf, higgledy piggledy, are previous threads & posts analyzing which income funds are doing what. The problem is that the informative posts are scattered at random, the archives are difficult to search, so some of the useful material has probably been lost.

    i'm wondering if we could work gradually towards a classification system, even if rudimentary. For example, there's one bank income fund that does a lot of derivatives, but i don't remember which. Then we had posts identifying that another bank income fund did *not* appear to do derivatives, not surprisingly it had a lower return.

    i'm not suggesting we should work this up formally, i'm only wondering if we could work towards some collaborative info storage system. Plus i'm asking you because you're one of the brave but small brigade on here that dares to read prospectuses.

  10. #19
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    Quote Originally Posted by Belguy View Post
    Is it worth switching from the RBC Monthly Income Fund to the Mawer Balanced Fund (MAW 104)? Is the latter available through CIBC Investors Edge discount brokerage?
    Most brokerages would have it available. There is a $5k minimum, I believe. It is a different type of fund. Does not distribute monthly income and distribution yield is small (~1%). But could be ideal for those in accumulation stage - long term growth. I don't own it.

  11. #20
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    Quote Originally Posted by humble_pie View Post
    i'm not suggesting we should work this up formally, i'm only wondering if we could work towards some collaborative info storage system. Plus i'm asking you because you're one of the brave but small brigade on here that dares to read prospectuses.
    Humble, I'm interested in this idea. A very similar thought crossed my mind some time ago (about identifying which ETFs are pure and which use derivatives and anything other than stocks/bonds).

    It would be daunting to do alone. You may be right about the collaborative approach. Do you think it might work to put our results on a form of 'wiki' that can be edited by several people?

    And you're right. If the prospectus says it may happen, I also assume it does. Maybe the solution to this is a simple shared google spreadsheet, with multiple columns for the various sorts of permitted exposure. Yes I think this would be useful. Thoughts? e.g.

    XIU stocks
    BLAH stocks bonds forex/swaps options futures

    Last edited by james4beach; 2015-10-23 at 02:06 PM.

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