# TD E-Series.. which...



## Jericho (Dec 23, 2011)

I've been doing lots of learning over the past few weeks and on Monday, I have an appointment to have my RSP transferred from BMO to TD and I also have some cash that I've put into a general savings TFSA with TD. I'm thinking of going the E-series route as many on here say that in the long run you pay much less in fees.

I'm hoping not to have to draw on this for at least 20 years (the non registered funds). While I'm still a total newbie to investing, have any of you had great success with any particular fund lately or any predictions as to which will be a decent fund to stick with over the next little while?

The guy at TD wants me to put my money into their monthly income fund, saying that it has higher returns but the MER is quite higher than many of the E-Series funds.


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## Miser (Apr 24, 2011)

MER's are way too high.....hence the ETF rise.


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## Jericho (Dec 23, 2011)

Those MER's are well under 1%.... but I've been told to hold off on ETF's until I get a nice stockpile of savings first


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## Sampson (Apr 3, 2009)

Just recreate the monthly income fund allocations using the e-series fund.

http://www.tdam.com/Content/Products/MutualFunds/Funds/p_FundCard.asp?FID=6162&TAB=HOLD&PID=1&SI=3

The fund is a standard balanced fund with 50% equity, 40% bonds, and 10% other.

Certainly if you went 60% TD e-series CDN Index + 40% TD e-series CDN Bond you would capture similar gains. There would be less emphasis on the REITS and other income trusts, but those effects won't be extremely dramatic over the long term.


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## fatcat (Nov 11, 2009)

jericho, the stated goal of this fund is to provide monthly income with "capital appreciation as secondary objective"

you are now working correct ? ... you have monthly income since you are in the prime of your working life

what you need is capital appreciation and you continue to consider a fund that not only has an mer of 1.48 but isn't even designed to grow capital

not to mention that is 41% weighted in financials

why do you even listen to this guy ?

sampson has got it right, use the excellent e-series and create a better mix of your own for about .5 MER

or go with somehting like claymore balanced growth core portfolio which has everything including the kitchen sink in it


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## Jericho (Dec 23, 2011)

Thanks, I'll ask to just open an account and I'll purchase the funds myself instead of having the bank direct me. Again, I'm new and am learning but would like to settle my money in sometime over the next few months.

I do have a good paying job but I guess I'm confused over the monthly income fund and other funds... I thought that high returns regardless of the fund was the main objective so interest can compound on itself... goes to show how little I know so far... but I'm reading, I swear!


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## fatcat (Nov 11, 2009)

i am learning too ...

my understanding has always been that you cannot have both income and long term capital appreciation in the same vehicle

why, because companies that are designed to grow and create capital appreciation tend to plow money into growth (think amazon) and therefore don't return it to shareholders in the form of income

companies that are mature and have largely filled out their market space (think johnson and johnson) tend to want to be attractive by virtue of giving dividends (income) to shareholders

a company needs to decide what it does with its profits ... reward the shareholders or try get bigger ... they tend to be mutually incompatible

i would say that the td e-series allows you to choose a usa index fund, a canadian index fund, an international index fund and a bond fund and you are finished at an mer of less than .5%

anyway, good luck

ps. the best way to deal with the big 5 banks in canada is to never buy any of their products or services, just own their stock  (td e-series being the rare exception)

pps. at your age and in this market i wouldn't buy any more than 15% in the bond fund ... others may disagree


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## Argonaut (Dec 7, 2010)

Not sure I understand fatcat's line of thinking. Growth and income are not mutually exclusive, but complimentary. Using a lumbering poorly-run dinosaur like J&J as an example is one thing. Think about Telus growing with smartphones and paying out dividends, or a pipeline expanding networks while cutting cheques to shareholders, or McDonalds growing globally while raising dividends annually. These are the highest quality stocks around. Dividends are a huge part of total returns, and should be ignored at an investor's own peril.


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## PharmD (Dec 21, 2011)

Ironically TD's monthly income fund has a relatively low distribution, but high capital appreciation. It is a solid fund, but not great as a monthly income fund. I have considered it before and think its a good product, but not one I am particularily interested in.


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## Sampson (Apr 3, 2009)

You simply have to deconstruct why the TD monthly income fund has been performing well, and whether you can recreate this viable using different, cheaper products.

The fund is (i) heavily focused in the Canadian market, (ii) it has a strong weighting to bonds, (iii) and has higher than average exposure to REITs and income trusts (compared to other diversified funds).

This is why it has performed well. Now can you (i) recreate those elements using the other e-series products? and (ii) will this continue to outperform going forward?


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## fatcat (Nov 11, 2009)

> Not sure I understand fatcat's line of thinking. Growth and income are not mutually exclusive, but complimentary. Using a lumbering poorly-run dinosaur like J&J as an example is one thing. Think about Telus growing with smartphones and paying out dividends, or a pipeline expanding networks while cutting cheques to shareholders, or McDonalds growing globally while raising dividends annually. These are the highest quality stocks around. Dividends are a huge part of total returns, and should be ignored at an investor's own peril.


there are stocks that show good growth and also pay decent dividends and there are funds that are growth and income funds but in the main there are opposing investment concepts, that's all i am saying ... and a 26 year old should be invested heavily in companies that have strong growth prospects (i.e. will return higher than average capital appreciation)

from investopedia: 
*Definition of 'Growth Fund'*
_A diversified portfolio of stocks that has capital appreciation as its primary goal, with little or no dividend payouts_
*Definition of 'Income Fund'*
_A type of mutual fund that emphasizes current income, either on a monthly or quarterly basis, as opposed to capital appreciation._



> You simply have to deconstruct why the TD monthly income fund has been performing well, and whether you can recreate this viable using different, cheaper products.
> 
> The fund is (i) heavily focused in the Canadian market, (ii) it has a strong weighting to bonds, (iii) and has higher than average exposure to REITs and income trusts (compared to other diversified funds).
> 
> This is why it has performed well. Now can you (i) recreate those elements using the other e-series products? and (ii) will this continue to outperform going forward?


 exactly, it's heavily focussed on canadian banks and bonds and reit's in order to return as much as possible here and now but these are products that won't maximize capital growth versus a sector like small-caps which typically show very high growth possibilities (and low income possibilities)

from wikipedia: _Studies of stock returns going back to 1925 have suggested that "smaller is better." On average, the *highest returns have come from stocks with the lowest market capitalization* (common shares outstanding times share price)._

62 year olds need here and now money
26 year olds need capital appreciation so they can have here and now money when they are 62

that's all i'm saying 

obviously any given fund can work wonders in any given year


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## Jericho (Dec 23, 2011)

I've handed my paperwork into the branch a few weeks ago... does it take a long time to have accounts converted to e-series? I thought this was supposed to be relatively easy but it's been quite a painful process so far..


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## Anonymous (Aug 21, 2011)

I'm in the same boat Jericho, last time I went into the bank to set up an e-series TFSA they just kept trying to get me to buy their more expensive mutual funds. 

I'm in my early 20s and thinking of going with the following allocation:

40% Canadian Equity
20% U.S. Equity
15% Nasdaq
25% International Equity

Some may think its risky as I don't have a bond component, but I don't foresee needing the money in the short term, and am comfortable riding the market. 

I'm planning on going with the unhedged options. My only concern is having 35% exposed to USD, but I've been reading that these currency neutral funds rarely outperform their unhedged counterparts. 

The international equity fund's MER is very similar whether its unhedged or hedged (0.51 vs 0.53) so I may use the hedged version to eliminate one area of risk, however the U.S. equity MER comparison is (0.35 vs 0.51) so I'm not convinced its worth the added cost. 

I don't mean to highjack your thread, but any input?


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## Xoron (Jun 22, 2010)

Jericho said:


> I've handed my paperwork into the branch a few weeks ago... does it take a long time to have accounts converted to e-series? I thought this was supposed to be relatively easy but it's been quite a painful process so far..


Yes, it can take weeks. Follow up (on both sides) constantly. Ask specifically about the delays. Get someone to pay attention.

You'd be surprised the causes of these "delays". For example: A field on the form not filled out, and then they take their sweet time getting back to you to let you know about it. (the delays are usually on the sending institutions side)

This whole process should take no more than 2 business days, but man they really drag the process out.


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## Eclectic12 (Oct 20, 2010)

fatcat said:


> i am learning too ...
> 
> my understanding has always been that you cannot have both income and long term capital appreciation in the same vehicle
> 
> [ ... ]


I'm not sure why you seem to think this is impossible. One way to do this is where you buy the investment when others are selling in a panic but the business is still stable, there can be significant opportunities for both.

As an example I bought BNS in Mar 2009 for $29. It hit $46 by Aug and is currently at $51. Meanwhile, it's set to pay $2.08 in dividends this year, which based on cost is 6.9%. 

I also added to my Triax Diversified High Yield Trust (TRH.un) at the same time for $8 before selling in Mar 2011 at $12.10 to pay off more of my mortgage. Distribution was $0.84 per year for 10.5% plus a capital gain of $4.10 per share.


Of course I've been following both for years before hand ....


Cheers


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## Jericho (Dec 23, 2011)

Finally got an inbox message saying my accounts have been converted to e-series accounts but it doesn't show on the TD banking site... Any of you that have e-series funds, do you notice the same? Or is there some sort of distinction to show that they're e-series?


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## Dibs (May 26, 2011)

The e-series funds look like this:









Sometimes it takes one or two business days for the changes to appear on the website. If it hasn't changed by Wednesday I would start asking questions.

Edit: This is through TDW, so it may be different with the TD website.


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## PharmD (Dec 21, 2011)

I think Dibs example is from TD Waterhouse. In the TD mutual fund account it looks different, but from my recollection it does not switch the funds you already own into the e-series version of it. You have to go in and switch or sell and then buy the e-series versions of the funds that you want. If that's not clear please ask again as I don't think that I explained it very well.


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## GoldStone (Mar 6, 2011)

PharmD is right. Once the account conversion is done, you have to switch the funds from i-series to e-series.


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## Soils4Peace (Mar 14, 2010)

Anonymous said:


> I'm in the same boat Jericho, last time I went into the bank to set up an e-series TFSA they just kept trying to get me to buy their more expensive mutual funds.
> 
> I'm in my early 20s and thinking of going with the following allocation:
> 
> ...


I go with unhedged US (TDB902), hedged EAFE (TDB905), same reasoning as yours. Another comment - find out how much AAPL is in 902 + 908 and decide if you want that much exposure to one company in an indexing strategy. Similarly, if you have 40% in Canada then you have around 8% in Big 5 Banks; are you comfortable with that?


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## Jericho (Dec 23, 2011)

Called in and figured out the e-series mess... however they told me that any purchases would be rejected as e-series funds are too risky for me...? When I was asked the questionnaire, I was told that it meant nothing, it was just to give a broad understanding of what's available.


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## GoldStone (Mar 6, 2011)

Jericho said:


> however they told me that any purchases would be rejected as e-series funds are too risky for me...? When I was asked the questionnaire, I was told that it meant nothing, it was just to give a broad understanding of what's available.


This is just stupid policy. The risk profile depends on the asset allocation, NOT on the fund series. A portfolio of e-series funds can easily have less risk than a portfolio of high-MER i-series funds.

I say fill in another questionnaire. Select the riskiest answers possible so they never hassle you again. Then build the portfolio you want.


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## Soils4Peace (Mar 14, 2010)

... or just forget about TD and go to TDW from the start, just to avoid the aggravation. The thing is, if you frequent this forum you are likely already more sophisticated than the front line folks at TD.


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## mrPPincer (Nov 21, 2011)

GoldStone said:


> I say fill in another questionnaire. Select the riskiest answers possible so they never hassle you again. Then build the portfolio you want.


good advise

The questionaire is valuable only as a tool to help you decide what your asset allocation should be.
If your answers make it so the mutual fund companies decide they should interfere with your choices as an informed investor, then it's a drawback.

I would not suggest to go to TDW though, unless you wish to add individual stocks, bonds or ETFs to your portfolio.
TD investment services has advantages such as the ability to link to your high interest savings account, no fee account, or whatever you're using for quick rebalancing etc.
Also, TDW has annual account fees if your balance is less than 25K in a registered account, dunno if that applies to you.

If you wish to switch over to TDW later, you can easily do so by going to your branch and setting up an in-kind transfer.
You might want to keep at least one account with TD investment services even so, just for the convenience of same-day investing, withdrawal, or rebalancing.


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## GoldStone (Mar 6, 2011)

mrPPincer said:


> Also, TDW has annual account fees if your balance is less than 25K in a registered account, dunno if that applies to you.


That's the key point. Only go to TDW if you have more than 25K in a registered account. If you have less than 25K, stay right where you are to avoid paying annual fees.


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## Clacker (Mar 18, 2012)

Jericho said:


> Called in and figured out the e-series mess... however they told me that any purchases would be rejected as e-series funds are too risky for me...? When I was asked the questionnaire, I was told that it meant nothing, it was just to give a broad understanding of what's available.


Just to clarify what some of the other posters are saying, it is likely that when you did your risk profile it recommended something close to >=80% "Fixed Income". You would still be able to purchase the e-series bond funds, but you would not be allowed to purchase a large portion of the equity funds. As the others have suggested, go back and re-fill out the survey claiming that you have the most money possible and that you want the most risk possible. This doesn't mean you have to invest risky, just that you'll have the ability to place your money where you want it. And if you follow the advice of the ppl on this forum you won't be going wrong.


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## Cal (Jun 17, 2009)

Does anyone know how to find what the distribution yield is for the TD e series funds? I can find the webpage that shows when the distribution happens, and I do know that the distribution can fluctuate based upon the holdings, but there should be info available regarding the yield somewhere? Anyone?


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## aldur1 (Aug 17, 2011)

The best place to look for distribution information on the TD e series is at TD Waterhouse --> Market and Research --> Mutual Fund.


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## Cal (Jun 17, 2009)

Bingo - Thanks.


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