# Whats so great about TD Eseries?



## Lilyukyuk (Nov 30, 2011)

Hi all....

Ive been looking at contributing to my RSPS via my own self directed account. Looking at mainly funds - don't know enough about ETFS to venture there yet (I have one via work already holding aggressive growth funds).

In my research, lots of people are touting the TD e-series....great cuz Im already with TD etc etc...but tell me - what's so great about it? I get that it's low MER etc etc...but compare it to something like ING's mutual funds - MER of 1.07%, plus if you open an account now you get a 50 buck bonus. (Quick review indicates that the performance is below par...).

So if you wouldn't mind pointing me in the right direction - or giving a quick low down of why the e-series is so great? Also, I already have a WH account - is the e-series something I can purchase via WH, or a whole new beast entirely?

Thanks in advance...
The one who still sucks at math. =)


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## DanFo (Apr 9, 2011)

you can purchase e-series direct via the tdw account...commision free to buy/sell them (after a 90 day holding persiod)..their main advantage over most other mutual funds is their lower MER....you can always call up past histories and compare them with other funds to see if did better than more expensive similiar funds with other institutions.


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## slacker (Mar 8, 2010)

Low cost, low tracking error.

These are only important if you wish to follow a passive couch potato type strategy.


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## HaroldCrump (Jun 10, 2009)

Lilyukyuk said:


> what's so great about it? I get that it's low MER etc etc...but compare it to something like ING's mutual funds - MER of 1.07%, plus if you open an account now you get a 50 buck bonus.


There is quite a big difference between (say) 0.50% of e-Series vs. 1.07% of ING.
It's more than double (since you said you suck at math  )

The $50 "bonus" is nothing when compared to the more you will pay in fees over 10, 15, or 20 years of your investment timeframe.

Disclosure: I have been a satisfied e-Series customer for over 4 years.


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## Lilyukyuk (Nov 30, 2011)

Harold and above posters:

Thanks - but performance wise? Isnt the index tracking, at this time in the market, more risky than a long term fund?

ANd 2 questions:


1. With the passive strategy - do you monitor the performance regularly (ie. like stocks) or is this something that you just buy into and sit and wait? When would the trigger to sell be?

2. Would a passive strategy compliment the active stuff I have going on at my work RSP account, or should I be trying to transfer that into passive as well?


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## HaroldCrump (Jun 10, 2009)

Lilyukyuk said:


> Thanks - but performance wise? Isnt the index tracking, at this time in the market, more risky than a long term fund?


Define what you mean by long term fund?
Are you referring to one of those target date funds, such as Retirement 2030, etc.?
If not, all the e-Series index funds can be considered "long term".



> When would the trigger to sell be?


You could re-balance either on a specific date (such as end of year) or based on allocation %
i.e. if your bond exposure goes above your tolerance threshold (+/- 5%) you could sell bonds to buy equities.



> 2. Would a passive strategy compliment the active stuff I have going on at my work RSP account, or should I be trying to transfer that into passive as well?


Absolutely, they can be complimentary.
It need not be either-or.
Just make sure that you don't end up duplicating the holdings too much.
For example, the financial stocks are a large % of typical Canadian equity index funds - so don't end up buying bank stocks in your SD-RRSP while holding the same in index funds.


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## Lilyukyuk (Nov 30, 2011)

Ok - phew - being an informed investor is tough!. Thanks all. A few technical questions:

1. TD Waterhouse discount brokerage - right now I have this, but its not a registered account - I'm assuming I have to open up a registered account and then buy the funds within this, correct? So a whole new account needs to be set up?

2. Whats up with the minimum $25k investments/fees for e-series RSPs - or is this already a thing of the past? If I have less than $25k for RSPs, are there any fees whatsoever besides the MER?


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## uptoolate (Oct 9, 2011)

If you have a TDW account and deal with a branch, you could just call the branch and they will do the paper work for the RRSP account. You will need to go in to sign the paper work.

As far as fees, one of the benefits of MFs is no commissions on buy/sell as ETFs would have. Theoretically there is an administrative charge for each registered account but this is waived at a fairly low amount and is dependent on your total balance at TD so if you already have business there you will likely be able to get it waived. Even if you don't have the qualifying balance, I would ask anyway because they will often waive the fee. Unfortunalely you may have to call them after the fee has been applied to get them to reverse it.


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## HaroldCrump (Jun 10, 2009)

Lilyukyuk said:


> 2. Whats up with the minimum $25k investments/fees for e-series RSPs - or is this already a thing of the past? If I have less than $25k for RSPs, are there any fees whatsoever besides the MER?


I haven't heard of the $25K minimum.
My e-Series account is from 2006.
So this must be something new since then, or a policy that ended prior to 2006.
Or you are mis-reading something.


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## Sampson (Apr 3, 2009)

The fee is for a TDW account, and any of their accounts will have fees if you have <$25k.

What you need to do is open a re regular MF account with TD Canada Trust, and put your money into a TD MMF. Then there is some paperwork you fill out, and you can open a e-series account. Once the account is open, you can transfer funds from your MMF into the e-series funds.

Canadian Capitalist has a good post on his blog with detailed instructions. This is the only way to avoid the fee if you don't qualify for the waived fee in the the TDW accounts.


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## Dibs (May 26, 2011)

Lilyukyuk said:


> Harold and above posters:
> 
> 1. With the passive strategy - do you monitor the performance regularly (ie. like stocks) or is this something that you just buy into and sit and wait? When would the trigger to sell be?
> 
> 2. Would a passive strategy compliment the active stuff I have going on at my work RSP account, or should I be trying to transfer that into passive as well?


If you are interested in passive investing, I would recommend you check out the following:

http://canadiancouchpotato.com/
Andrew Hallam's book Millionaire Teacher (he gives a passive investing strategy)
David Chilton's book The Wealthy Barber Returns (good arguments for passive investing)


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## Jungle (Feb 17, 2010)

Sampson said:


> The fee is for a TDW account, and any of their accounts will have fees if you have <$25k.


Well you _can_ open a TFSA in Waterhouse with no fees, using e-series funds and signing up for e-statements. It's just the rsp they do this.. not sure why when TD mutual funds will do it with no fees.


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## Barwelle (Feb 23, 2011)

I opened myself an e-Series TFSA account in Spring 2011. I went with TD Canada Trust (not TD Waterhouse) because the bank has more convenience for me. You can create and manage a Pre-authorized Purchase Plan (PPP) yourself online. I wanted to do this.

In case you don't already know, the PPP automatically deducts money from a linked bank account and invests it in the e-Series funds. With TD Canada Trust, you set this up yourself online, and any time you want to make changes to it, it is rather simple to do. You can set this up to automatically make a purchase weekly, bi-weekly, semi-monthly, monthly, quarterly, twice yearly, or once yearly. 

With TD Waterhouse, you have to call in to start and make any changes to the PPP, and I've heard that there are less options for the frequency of purchases. Also, Waterhouse is a discount brokerage. At the time, I didn't need one. I considered opening the account anyway for future use, but there are discount brokerages out there that are much lighter on the fees for the size of account that I will have once I start moving into ETFs and such. 

I liked the idea of being able to manage it without calling TD, so I didn't go with Waterhouse.


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## natalie_d (Nov 25, 2009)

I was debating between using TD e-Series and purchasing iShare ETFs through Questrade for index investing, and came to the conclusion that iShare ETFs are better in the long run:

Pros of iShare:
Lower MER than comparable e-Series fund (about 10 to 20 basis points)
Wider selection of indices

Cons of iShare:
Brokerage commission on each trade


For long term investors, the lower MER will more than offset the brokerage commission.


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## MrMatt (Dec 21, 2011)

natalie_d said:


> I was debating between using TD e-Series and purchasing iShare ETFs through Questrade for index investing, and came to the conclusion that iShare ETFs are better in the long run:
> 
> Pros of iShare:
> Lower MER than comparable e-Series fund (about 10 to 20 basis points)
> ...


If your purchases are large enough the lower MER compensates for the commissions on ongoing purchases.
Rebalancing commissions are also a concern.
I think they're actually quite competative for many people.

I don't see the number of options as a benefit, as long as they offer the product you want, the extras add no value. 

What about Vanguard ETFs?
Take VT, add some Canadian overweighting and your equity portion is done.

Instead of VT you could consider the 3 portions independantly, but then you need a pretty big portfolio.


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## Barwelle (Feb 23, 2011)

natalie_d said:


> Cons of iShare:
> Brokerage commission on each trade
> 
> 
> For long term investors, the lower MER will more than offset the brokerage commission.


Unless you want to use Dollar Cost Averaging. As an inexperienced investor, I like the idea of DCA, so I set up a TD account with monthly contributions. The commissions to do that in Questrade would cost too much.

But you're right about the long term advantage of ETFs, so I'm planning on keeping the TD account but selling the e-Series funds once they accumulate a significant amount (probably every 2nd year, depending on how much I put into it), and buying the equivalent ETFs in Questrade.

Canadian Couch Potato had a good comparison on his blog: http://canadiancouchpotato.com/2010/06/25/should-you-use-index-funds-or-etfs/

Mike Holman had a good one too. He made a spreadsheet that you can plug in your numbers and find out where the break-even point is where ETFs would be more efficient than e-Series funds. The link to the spreadsheet is at the bottom of the post.

http://www.moneysmartsblog.com/index-funds-vs-etfs/



> Rebalancing commissions are also a concern.


Like Canadian Couch Potato mentions in the link above, as long as you're making regular contributions (say, once per year) you can rebalance whenever you make a contribution. Someone made a good spreadsheet to figure out how much to buy of each fund/etf depending on what your target and current allocations are.


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## Lilyukyuk (Nov 30, 2011)

ok...so if im just getting e-series funds, what is the difference between a TD mutual fund account where there is no admin fee, and the TD waterhouse account where there is a fee unless u have 25k? (is it just the possibility of more investment options?)


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## uptoolate (Oct 9, 2011)

Andrew Hallam had a great comparison of e-series mutual funds with comparable ETFs and the benefits for investors who are starting out in his book The Millionaire Teacher.


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## Barwelle (Feb 23, 2011)

Lilyukyuk said:


> ok...so if im just getting e-series funds, what is the difference between a TD mutual fund account where there is no admin fee, and the TD waterhouse account where there is a fee unless u have 25k? (is it just the possibility of more investment options?)


The benefit of the TD mutual fund account, besides the lack of the fee for small accounts in TD Waterhouse as you mention, is somewhat more convenience. You can set up the account to make automatic purchases for you online, and change it any time you want. With TD Waterhouse, you have to call somebody to make adjustments to this automatic purchasing plan (which they call a Preauthorized Purchase Plan or PPP). Some people (including myself) would rather not have to call someone to do this, so depending on your personal preferences, this may or may not be a factor.

The benefit of the TD Waterhouse account is that it is a discount brokerage, which means that, like you said, there is a wider range of investment options. You can buy stocks, bonds, ETFs, anything that is traded on the market. 

Just keep in mind that, if you ever do want to explore these other investment options, Waterhouse is expensive for a discount brokerage, especially for people with smaller portfolios and people who don't trade often. Their fee schedule is here: http://www.tdwaterhouse.ca/products-services/investing/discount-brokerage/commissions-fees/asff.jsp

But the gist of it is: If you do less than 30 trades per quarter, or have a net worth that is lower than $50,000, you would have to pay a minimum of $29 per trade. Questrade, another discount brokerage, would charge you at most 1/3 of that, at $4.95-$9.95 per trade. So unless you meet those requirements, you probably won't want to stay with Waterhouse if you do decide to go beyond the E-series. If that's the case, why pay that yearly admin fee to have a Waterhouse account? Why would you pay that admin fee anyways if you're only holding e-Series funds and not even doing any trading? That was my thinking when I was looking into it.


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## Jungle (Feb 17, 2010)

There is another disadvantage to TD Mutual funds. You have to do that risk tolerance survey. Most e-series DIY's answer the questions with the option that provides the most risk, so they can build whatever portfolio they want. 

Now problem is, I think the survey expires every year. I missed out buying on some dips because the survey expired and they deemed it was beyond my risk tolerance to buy equity funds! 

With TD waterhouse, you can buy whatever you want. Once we hit 25K I will be moving it over there.


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## Sampson (Apr 3, 2009)

Jungle said:


> I think the survey expires every year.


Is this done online? I recall doing a risk survey when I opened the account with TD Mutual Funds AND when I mailed in the e-series account application.

Maybe its time to visit my local branch.

I wanted to ask them about the RESP contributions also, does anyone know if those can be done online?


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## Jungle (Feb 17, 2010)

It's done on the phone or at the branch. 

One time I went into the branch for something investment related and the banking officer interrupted me and started franticly printing that risk survey. He said I had to answer it again.. he said I had to do it, although I've done it a few times. 

A few months back, I tried to purchase some e-series funds in my wife's account, on a really down day (Aug 4 I believe), only to discover the order never went through. They don't even give you a warning or message saying the order failed.. no communication of this. We lost market opportunity and they would not honor the price we selected to buy at. 

In fact, they give you a confirmation number saying the order went though... then after a couple of days later you scratch your head wondering what happened to the order?

We had to call in to do the survey again. What I don't understand is my wife's account is 100% equity anyway, so what difference does it make to buy more equity?

Worst part is, sometimes you get a CSR that will believe in the survey and you have to explain to him, I just want to answer with the highest risk and don't really care about the questions.. just hope he doesn't try to defend the survey.

TDW is a much better system and once you have 25k, I would manage the rsp there. The SIP and monthly contribution is only a phone call away. They always answer fast and are polite and friendly.


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## Sampson (Apr 3, 2009)

We have TDW accounts, but most 99% of our monies are with a different brokerage. We only use TD because of the RESPs, had to open a Select Service account just for our son. 

Last year when I did the survey, it took a little explaining and a notice to the branch manager why someone willing to handle 100% equity risk is pitting all their money into a MMF. Can't win with thise guys.


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## Lilyukyuk (Nov 30, 2011)

I think the survey is just to cover their asses....

Is it just me or is TD really confusing? So many intricacies and loopholes. So many differing policies between departments of TD as a whole. I have been with TD for most of my entire life, yet I have exposure to RBC and BMO...and the latter two seem much more straightforward and transparent.


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## Lilyukyuk (Nov 30, 2011)

Oh also, this might be a really stupid question - but if I have a group RSP via my work with BMO, couldn't I just choose funds that are part of the "couch potato" strategy? or are those funds not available? (Im trying to keep things simple instead of opening various accounts)


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## MrMatt (Dec 21, 2011)

Lilyukyuk said:


> Oh also, this might be a really stupid question - but if I have a group RSP via my work with BMO, couldn't I just choose funds that are part of the "couch potato" strategy? or are those funds not available? (Im trying to keep things simple instead of opening various accounts)


You could, just choose the lowest MER index funds they have.
I'm currently working on this myself, since I have a few accounts I can't reasonably merge together.


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