# Sun Life Milestone funds? Good idea?



## Romy (Jan 14, 2015)

Right now, I'm about 50% in stocks (via mutual funds and ETFs), 50% in cash. I'm looking to move about half my cash into a hedge that'll see some appreciation while remaining very safe. Any thoughts on Sun Life's Milestone 2020 fund? They offer a "money back guaranteed!" type of deal -- after the five year term, at the very least, you'll get your principal back, though if the fund appreciates in value, the maturity date amount will equal the highest value the fund reached during the time invested. Thoughts? Good hedge to save some cash for five years?


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## cashinstinct (Apr 4, 2009)

No.
They steal from you in fees.
Annual fee of 2.17%.

No mutual funds.


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## Romy (Jan 14, 2015)

cashinstinct said:


> No.
> They steal from you in fees.
> Annual fee of 2.17%.
> 
> No mutual funds.


What would you recommend as an alternative?


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## cashinstinct (Apr 4, 2009)

I would not recommend anything specific, but we need much more information about your situation to have any idea.

See previous posts and the information posters provided.


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## cainvest (May 1, 2013)

Looks like Sun Life's equivalent to a bank's Market Linked GIC.

If you want to preserve capital, how about just a regular 3-5 yr GIC?


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## Romy (Jan 14, 2015)

Looking to preserve capital, yes, but some appreciation, at least matching inflation. Right now I'm 50% stocks, 50% cash. Hoping to end up with 50% stocks, 25% fixed income, 25% cash.

The hope from Sun Life's Milestone is that it'll gain more than a GIC (which at best might match inflation) while being just as low-risk.


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## cainvest (May 1, 2013)

Romy said:


> The hope from Sun Life's Milestone is that it'll gain more than a GIC (which at best might match inflation) while being just as low-risk.


Yes BUT .... if the markets go bearish it'll return less than a normal GIC would, that's the risk. So as you look at your portfolio in total, you're already tied 50% into equities (mid-high risk) why tie your low risk portion to equities as well?

The other things to consider,
- Any loads on these funds?
- What's their track record for both Bull and Bear markets?


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## fatcat (Nov 11, 2009)

another sh##ty confusing product designed to fleece newbies

a target maturity bond fund is designed to do the same thing as this: http://funds.rbcgam.com/etfs/overview/fixed-income.html which is to pay out on a certain date

forgive me for asking the obvious question, if you want to have 25% in fixed income why not just buy one or more bond funds ?


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## Romy (Jan 14, 2015)

fatcat said:


> forgive me for asking the obvious question, if you want to have 25% in fixed income why not just buy one or more bond funds ?


I bought a couple bond mutual funds a few years ago, and was burned on them. Both lost value. 

What do you think of TD's Market Growth GICs?


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## cainvest (May 1, 2013)

Romy said:


> What do you think of TD's Market Growth GICs?


Same thing as the Sun Life ...


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## cashinstinct (Apr 4, 2009)

An issue ith market growth products are that you are committed to price of equities in a certain date range, and you won't get the benefit of dividends.

Example: look at the return of products bought in early 2007 Vs early 2009...

If you want equities type of return, buy equities.

If you want capital preservation, normal GICs which will give you interest.

IF stock market goes bad for 5-10 years, your market-linked GIC will have $0 return, 0% interest....


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## Romy (Jan 14, 2015)

cainvest said:


> Same thing as the Sun Life ...


What would you recommend? Just a simple, no-frills GIC, even if the rate is only at ~1%?


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## cashinstinct (Apr 4, 2009)

Romy said:


> What would you recommend? Just a simple, no-frills GIC, even if the rate is only at ~1%?


For a 5-year GIC, you can get 2%+ rate...

There is a price to pay for capital preservation. Do you have any reason to want a 5-year horizon?


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## Romy (Jan 14, 2015)

cashinstinct said:


> For a 5-year GIC, you can get 2%+ rate...
> 
> There is a price to pay for capital preservation. Do you have any reason to want a 5-year horizon?


I have enough cash + job security to feel reasonably safe for the next five years. This will give me a shot in the arm in five years time (the equity investments are for retirement). The 5-year figure isn't set in stone, though, and can be shorter or longer than that.


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## fatcat (Nov 11, 2009)

Romy said:


> I bought a couple bond mutual funds a few years ago, and was burned on them. Both lost value.
> 
> What do you think of TD's Market Growth GICs?


not much, just as bad as the sun products 

the fact that you were burned before doesn't mean you will be again, it's a common investor mistake, assuming that a win or a loss is predictive of the future

in any event you are risk averse, which is fine

i would say building a gic ladder would be the way to go ... divide your 25% fixed income allocation in 5% allotments and buy a gic for 1,2,3,4,5 years 

a year from now when the 1st year matures you roll it over to a 5-year and so on .. i think you can average 2% doing this in current money and more if and when rates rise

try a gic broker to help you get going like gic direct


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## cainvest (May 1, 2013)

cashinstinct said:


> For a 5-year GIC, you can get 2%+ rate...
> 
> There is a price to pay for capital preservation.


^^ This and add the price you pay for a fixed and guaranteed return rate.

Want to chance to make/save a few more bucks because you don't like the lower GIC rates .... 
- Switch the rest of your mutual funds to ETFs and/or choose low MER ones (read: e-series).
- Increase your stock exposure by 5% providing you can handle the extra risk.


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