This fund was designed to provide monthly income as the name implies. The managers tried, where possible, to make that tax advantaged.
Originally Posted by GreatLaker
Performance was good the first few years so people started adding it to registered accounts. the managers were concerned thst the fund would get too big( yeah hard to believe) to be able to effectively acheive its mandate of monthly income. They felt there were better funds in their lineup for reinvesting distributions in tax advantaged vehicles like rsps and RIFs. Hence the restriction to non registered accounts.
BTW RBC employees were likely the most responsible for putting clients into MIF within registered plans and there was backlash from employees at the time.
The Series A performance looks fine to me,
Originally Posted by AltaRed
10 years: 4.88%
15 years: 6.71%
That's higher than a 60/40 XIU and XBB which gave:
10 years: 4.69%
15 years: 6.56%
Combine that with the very mild 11% drop in 2008, and I think RBC Monthly Income hits a pretty sweet spot. It's too bad they don't offer this in registered accounts, but this may still be a very good "one size fits all" option for a retiree who is doing regular withdrawals out of non-registered. Like the Mawer Balanced Fund.
Last edited by james4beach; 2017-03-15 at 08:26 PM.
In a registered account you can emulate the performance of RBC Monthly Income with a 50/50 split between RBC Dividend and RBC CDN Bond Index Fund.
Ah, that's interesting. Does it achieve similar performance? One of the impressive things about RBC Monthly Income is that it did better than XIU & XBB
Originally Posted by OhGreatGuru
RBC Monthly Income fund is going to vary its allocation depending on the best guess of the money managers. If there is any alpha in that decision and it is done correctly more often than not, then it could beat a fixed equity/bond allocation.
I suspect the managers are making good active allocation decisions. Just look at 2008 ... the fund declined 11% that year.
Other balanced funds declined much more. CIBC's fell 15% and TD's fell 23%. A static 60/40 of XIU & XBB fell 16%. MAW104 fell 16% too.
For me, the great handling of 2008 plus fine performance before & after is the proof that RBC Monthly Income managers are good money managers. This is rare.
Maybe. It could also just be that their hunches were good for that time period. I wouldn't necessarily call them good money managers unless there was a 10-15-20 year track record of outperformance. But if the same folks are making decisions today that made them the last 10 years, I would give them the edge over some others. As the saying goes... past performance does not guarantee future performance.