# Canadian Equities: Index ETF or Mawer?



## Time4earlyretirement (Feb 21, 2014)

Hi everyone,

Does anyone have opinion on this? Mawer historically seems to be worth the MER.

http://www.mawer.com/mutual-funds/fund-profiles/mawer-canadian-equity-fund/


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## AltaRed (Jun 8, 2009)

Mawer has an excellent record in the Canadian market. Whether that continues into the future is always the question. 

That said, if one does NOT want to have a discount brokerage and has the funds to contract directly with Mawer, that would be to the benefit of the bulk of retail investors.


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## fatcat (Nov 11, 2009)

Time4earlyretirement said:


> Hi everyone,
> 
> Does anyone have opinion on this? Mawer historically seems to be worth the MER.
> 
> http://www.mawer.com/mutual-funds/fund-profiles/mawer-canadian-equity-fund/


"past returns are no indication of future performance "... 

it has to beat the index by about 1% ... 

the evidence for funds versus etf's is largely in and funds are generally the losers afaik


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## GoldStone (Mar 6, 2011)

OP, this topic comes up on a regular basis. We have debated it at length. Try searching the forum for "Mawer".


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## avrex (Nov 14, 2010)

I just did search it 
This is the *6th Investing thread*, so far 2014, with the word "Mawer" in the title.

Why do people have such a h**d on for "Mawer" lately?

MER---Fund
1.21%---Mawer Canadian Equity Fund
1.21%---Mawer U.S. Equity Fund
1.45%---Mawer Global Equity Fund
1.49%---Mawer International Equity Fund

It seems that people *feel better* trying to 'beat' the index, using the somewhat-lower cost Mawer funds (i.e. 1.21%) versus trying to beat the index with regular mutual funds (i.e. 2.50%)

I've got an idea. *Stick with 'truly' low-fee ETFs instead *(i.e. < 0.50%)


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## GoldStone (Mar 6, 2011)

avrex said:


> This is the 6th Investing thread, so far 2014, with the word "Mawer" in the title.
> 
> Why do people have such a h**d on for "Mawer" lately?


Study the 6 threads that you found. The answer is there somewhere.


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## Time4earlyretirement (Feb 21, 2014)

avrex said:


> I just did search it
> This is the *6th Investing thread*, so far 2014, with the word "Mawer" in the title.
> 
> Why do people have such a h**d on for "Mawer" lately?
> ...


Check the webpage, Mawer has outperformed by 2.2% over 10 years net of fees. Only Mawer's Canadian Equity seems to be worthwhile.

I guess in the end, its a redundant argument of active vs passive. I may invest Mawer in my RRSP through the company, and Index with my RRSP outside of work.


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## avrex (Nov 14, 2010)

Time4earlyretirement said:


> I may invest Mawer in my RRSP *through the company*, and Index with my RRSP outside of work.


Ah, I see

*This is through your work pension.* Therefore, your choices are limited as to what the company pension plan offers.
In your case, it is Mawer. This isn't as bad as some other company pensions, with respect to costs.

I understand now.



Time4earlyretirement said:


> Mawer has outperformed by 2.2% over 10 years net of fees.
> I guess in the end, its a redundant argument of *active vs passive*.


Yes, this argument will always exist on forums like this.
I believe the majority of people should follow the *passive low-cost indexing* approach.


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## Blush (Jan 9, 2014)

*Stick with 'truly' low-fee ETFs instead *(i.e. < 0.50%)[/QUOTE]

So get rid of the balanced funds and go etf's?


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## canucked_up (Feb 23, 2014)

Stirring the Pot!

Mawer New Canada - closed, but very good record over 26 years.

I am on the side of etf's set it and forget it strategy. Some investors though, want/need to play with their funds and tend to stray from true indexing(lots of niche funds to choose from), or trade emotionally. Human nature and emotion is hard to overcome.


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## dubmac (Jan 9, 2011)

Blush said:


> *Stick with 'truly' low-fee ETFs instead *(i.e. < 0.50%)


So get rid of the balanced funds and go etf's?[/QUOTE]

Why?
Why not own both Mawer Balanced and ETF's. Both are good low cost products. 

There will be some out there that downplay Mawer and that their performance is not guaranteed. But, before you do, check their diversficiation. The fund is 30% bond, and the other 70% is a good mix of equities (Int'l, US and Can.). There are many no-fee financial planners who agree that it is a good product for people who want seek a good return with no hassle, and no headache. I, for one, fit that description.


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## getliquid (Mar 2, 2014)

1.21%---Mawer Canadian Equity Fund MW104
1.21%---Mawer U.S. Equity Fund
1.45%---Mawer Global Equity Fund MW106
1.49%---Mawer International Equity Fund

?

is this fund guaranteed by CIDC? the etfs or regular bank mutual funds arent backed by CIDC either right? What are the chance of Mawer going under and we are left with nothing?

I have sizable amount of money I want to put away and take advantage of 20 yrs of compounding so looking for a secure place to place it.


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## GoldStone (Mar 6, 2011)

getliquid said:


> is this fund guaranteed by CIDC?


No.



getliquid said:


> the etfs or regular bank mutual funds arent backed by CIDC either right?


No.



getliquid said:


> What are the chance of Mawer going under and we are left with nothing?


Close to zero. Mutual funds assets (your money) are held by the mutual fund trustee. They are fully segregated from the Mawer assets.

BTW, it's CDIC not CIDC. Canadian Deposit Insurance Corporation. Mutual funds and ETFs are not deposits.


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## dubmac (Jan 9, 2011)

getliquid said:


> 1.21%---Mawer Canadian Equity Fund MW104
> 1.21%---Mawer U.S. Equity Fund
> 1.45%---Mawer Global Equity Fund MW106
> 1.49%---Mawer International Equity Fund
> ...


liquid...

The MER for Mawer Balanced fund is 0.78%. https://www.google.ca/finance?q=maw104&ei=r_01U7DUMsfQqAHVqQE

It is not anywhere near the numbers you are quoting above.

Do your due diligence as an investor, and lookup MAW104...and check the details for yourself. If you think that you can do better through ETF's, then go with ETF's.


...and..BTW ...the Mawer New Canada fund is included within the diversification of funds in Mawer Balanced -so you get a portion of New Canada Fund (which is closed to investors) when you invest in MAW104.


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## fatcat (Nov 11, 2009)

every young investor should read this: http://wheredoesallmymoneygo.com/your-lifetime-investing-fees-could-easily-top-100000/



> *Writer and blogger Preet Banerjee estimates how much we pay in investing fees over a lifetime by using the example of a 25-year-old who invests over 40 years and uses an investment adviser selling conventional mutual funds. Grand total: $170,578.27.*


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## avrex (Nov 14, 2010)

Blush said:


> avrex said:
> 
> 
> > I've got an idea. *Stick with 'truly' low-fee ETFs instead *(i.e. < 0.50%)
> ...


Sure, why not. Here you go.


ETFAllocationMERiShares S&P/TSX Capped Composite Index ETF (XIC)70%0.05%iShares High Quality Canadian Bond Index ETF (CAB)30%0.12%*Result - A Cheap Balanced ETF portfolio*0.07%


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## Time4earlyretirement (Feb 21, 2014)

canucked_up said:


> Stirring the Pot!
> 
> Mawer New Canada - closed, but very good record over 26 years.
> 
> I am on the side of etf's set it and forget it strategy. Some investors though, want/need to play with their funds and tend to stray from true indexing(lots of niche funds to choose from), or trade emotionally. Human nature and emotion is hard to overcome.


I do believe that there is some value in money managers when it comes to things outside of the broadest markets, where intellectual capital and strong research/mgmt can create value, small cap being one...however New Canada which I would be interested in is closed


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## dubmac (Jan 9, 2011)

avrex said:


> Sure, why not. Here you go.
> 
> 
> ETFAllocationMERiShares S&P/TSX Capped Composite Index ETF (XIC)70%0.05%iShares High Quality Canadian Bond Index ETF (CAB)30%0.12%*Result - A Cheap Balanced ETF portfolio*0.07%











Avrex - 

Click on the attached graphic - I have taken a 6 yr history of MAW104, XIC and CAB. 

If you were to buy 70% XIC and 30% CAB, you wouldn't have any US or Int'l or Global equity at all - you would have missed the last 14-16 month huge increase from US Equity especially. In short, you wouldn't be diversified at all. If you were to have purchased MAW104, you would have been up some 30%! 

You may prefer ETF's over MF's - fine - I get it. You don't want the cost of the MER. But re-consider at least your 70% XIC choice. Canada is only 4% of the global market. You may want to consider putting some into US equity & other in't & global equities.


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## avrex (Nov 14, 2010)

The above was just an illustration of what is possible with low-fee ETFs (as I was responding to @Blush's query about Canadian balanced funds).

Yes, you obviously would want to include US and Global equity, to make a properly diversified portfolio.
And yes, you can do that by including those classes via low-fee iShares or Vanguard ETFs.
i.e. just like the Couch Potato portfolio models.

My point was that you can use *low-fee ETFs to build your portfolio, instead of high-fee Mutual Funds.*


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## Blush (Jan 9, 2014)

avrex said:


> The above was just an illustration of what is possible with low-fee ETFs (as I was responding to @Blush's query about Canadian balanced funds). My point was that you can use *low-fee ETFs to build your portfolio, instead of high-fee Mutual Funds.*


Excellent advice thanks so much. I am RBC Direct Investor and don't have access to Mawer Fund (unless I go direct with Mawer). So the low ETF's balanced fund is best for me and I will include US and Global equity.


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## Blush (Jan 9, 2014)

Quote Originally Posted by avrex View Post
I've got an idea. Stick with 'truly' low-fee ETFs instead (i.e. < 0.50%)

This is my plan for Balanced ETF Portfolio...thoughts? I bought VUN in early March and it's down every week since.

iShares S&P/TSX Capped Composite Index ETF (XIC) 30% 0.05%
iShares High Quality Canadian Bond Index ETF (CAB) 30% 0.12%
Vanguard US Total Market (VUN) 20% 0.15%
iShares MSCI EAFE IMI (XEF) International equity 20% 0.20%


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## avrex (Nov 14, 2010)

Diversified. Low-fee.

Looks great. :encouragement:


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