# Mawer & diversification



## Retired1 (Dec 28, 2020)

Good morning and thanks so much in advance for any input. 

After 30+ years with Assante we have accumulated over 350K in our TFSA and RRSP’s. We are now retired and very comfortable with DB pensions and CPP. 

The investment money is not needed for living expenses and so it is likely to be a legacy for our adult children. As our accounts with Assante are over 350K the MER “hit” is even more apparent. 

Our objective is to move this money to TD direct. We are interested in Mawer Global equity. I understand that Mawer is another mutual fund. However, I am not a confident investor (yet). The Mawer MER is significantly less.

1) Am I on the right track?
2) as Mawer Global Equity is a managed mutual fund, can I invest the entire 350K in this one fund and consider it safely diversified? If not, how should I diversify this amount?
3) I will need to work with a TD financial advisor to move this money and complete the initial set up. What should I expect from this TD advisor?
4) At Assante we have had an annualized return of 6.88% since 2011. What should I expect from Mawer Global Equity going forward?
5) any other input?

Thanks so much!


----------



## MrMatt (Dec 21, 2011)

Retired1 said:


> Good morning and thanks so much in advance for any input.
> 
> After 30+ years with Assante we have accumulated over 350K in our TFSA and RRSP’s. We are now retired and very comfortable with DB pensions and CPP.
> 
> ...


1. Sounds like you're comfortable with it, so yes.
2. Yes, for equity. Mawer Global Equity Fund | Fund Profile
3. The TD financial advisors are a broad group. Some are great, some are horrible. I think you can expect a reasonable competent person to manage the paperwork.
4. I don't like this question. You have to consider what you were invested before.
5. For this plan, I would suggest getting an independant financial planner to provide advice, and provide specific information applicable to you, and point you in the direction. 
-Worst case they'll say that you're not a good fit for them.
Ideally they'll simply review your detailed plan, advise on major gotchas. Likely they'll charge a fee, or do this during the initial consult, when they decide if they will accept you as a client.

Nothing wrong with being rejected as a client, I know people who were considering termination offers from major union shops. They went to a variety of advisors, most were very happy with the advice, and how politely it was suggested that the services weren't appropriate for their financial situation.

Honestly it's over $300k, what's spending 1% or so to get unbiased advice on your plan? You'll be spending $5k/yr on MER as it is.


----------



## Spudd (Oct 11, 2011)

Mawer Global Equity is just equity, no bonds. Since you have pensions and CPP, perhaps this is your desired allocation, but some would consider this too risky for a retiree. If you were to lose half of the 350k would that affect your lifestyle, or can you happily live off just your pension and CPP? You might be happier in their Global Balanced Fund which is 60/40 equities/fixed income.

TD DI does not have advisors. The easiest way to set up an account would be to go to a branch and tell them you want to set up an account, they will give you a form where you'll fill in the details of your Assante account, and they will work with Assante to transfer the money. You don't need to speak to Assante to leave them. However, nobody at TD DI will give you any sort of investing advice, only mechanical advice as to how to open an account, how to input a trade, etc. 

Re what to expect for returns, you cannot predict returns ever. The best you can do is look at past performance to get an idea of how they have historically performed. You need to know your asset allocation at Assante to get a fair point of comparison - if they had you in a 60/40 portfolio then comparing against an all-equity fund wouldn't be fair.


----------



## AltaRed (Jun 8, 2009)

I agree with Spudd. By going to TDDI, you will be eliminating the high MER and/or the "% of AUM" charge Assante is charging. At 1% of $350k, that is significant each and every year.

I also agree we cannot comment on Mawer Global Equity without knowing your current asset allocation over the last number of years. FWIW, a CAGR of 6.88% since 2011 is not bad at all especially IF it was some mix of equity and bonds. Your reference point for performance can be obtained from Norm Rothery's Asset Mixer in which you plug in your current asset allocation, and a start year of 2011 and end year of 2020 and make a comparison. 

Note that MAW120 only contains 5% Cdn equity, with 51% being USA and the rest (44%) International. Are you happy with that? If I do a simple plug of that in the Asset Mixer for the 2011-2020 period, I get a CAGR of about 13%, which is about what the MAW120 chart says on the Mawer site. That would tell me your Assante mix was not 100% equity, or if it was, it wasn't in the 5/51/44 mix of MAW120, and/or they did a poor job of managing your money. And as Spudd says, past performance is no assurance of future performance. I expect future returns to be somewhat less than the past.


----------



## MrMatt (Dec 21, 2011)

Spudd said:


> TD DI does not have advisors.


But the in branch TD staff they send you to DOES have advisors.


----------



## Retired1 (Dec 28, 2020)

MrMatt said:


> 1. Sounds like you're comfortable with it, so yes.
> 2. Yes, for equity. Mawer Global Equity Fund | Fund Profile
> 3. The TD financial advisors are a broad group. Some are great, some are horrible. I think you can expect a reasonable competent person to manage the paperwork.
> 4. I don't like this question. You have to consider what you were invested before.
> ...


Thanks Mr Matt
I have contacted a TD advisor. Her resume includes a degree in electrical engineering. I’m going to conclude that she is above average. 

I may still search for a fee only advisor to help me get set up. At a minimum I would expect to stop paying Assante their MER and still maintain or improve our results. 

Thanks again. Much appreciated


----------



## Retired1 (Dec 28, 2020)

Spudd said:


> Mawer Global Equity is just equity, no bonds. Since you have pensions and CPP, perhaps this is your desired allocation, but some would consider this too risky for a retiree. If you were to lose half of the 350k would that affect your lifestyle, or can you happily live off just your pension and CPP? You might be happier in their Global Balanced Fund which is 60/40 equities/fixed income.
> 
> TD DI does not have advisors. The easiest way to set up an account would be to go to a branch and tell them you want to set up an account, they will give you a form where you'll fill in the details of your Assante account, and they will work with Assante to transfer the money. You don't need to speak to Assante to leave them. However, nobody at TD DI will give you any sort of investing advice, only mechanical advice as to how to open an account, how to input a trade, etc.
> 
> Re what to expect for returns, you cannot predict returns ever. The best you can do is look at past performance to get an idea of how they have historically performed. You need to know your asset allocation at Assante to get a fair point of comparison - if they had you in a 60/40 portfolio then comparing against an all-equity fund wouldn't be fair.



Thanks Spudd!
I did a quick check on Mawer Global Balanced as you suggest. It is also a 5 star (Morningstar) fund. It’s returns are at about 9.5% vs 13% for Mawer’s Global Equity. But it would be a less volatile investment which would appeal to my wife.

Maybe I should invest our RRSP in Mawer Global Equity and our TFSA in Mawer Global Balanced?

I am more confident because we are 3 years into retirement and we do everything we want to do while still saving about $2500 each month. We have never touched our investments. (Cash flow rich; Asset poor)

Our issue is we cannot justify the money Assante takes! Nice people but I can’t see how they earn my money if I can do the same or better thru TD direct and Mawer.

Thanks again. Much appreciated.


----------



## Retired1 (Dec 28, 2020)

AltaRed said:


> I agree with Spudd. By going to TDDI, you will be eliminating the high MER and/or the "% of AUM" charge Assante is charging. At 1% of $350k, that is significant each and every year.
> 
> I also agree we cannot comment on Mawer Global Equity without knowing your current asset allocation over the last number of years. FWIW, a CAGR of 6.88% since 2011 is not bad at all especially IF it was some mix of equity and bonds. Your reference point for performance can be obtained from Norm Rothery's Asset Mixer in which you plug in your current asset allocation, and a start year of 2011 and end year of 2020 and make a comparison.
> 
> Note that MAW120 only contains 5% Cdn equity, with 51% being USA and the rest (44%) International. Are you happy with that? If I do a simple plug of that in the Asset Mixer for the 2011-2020 period, I get a CAGR of about 13%, which is about what the MAW120 chart says on the Mawer site. That would tell me your Assante mix was not 100% equity, or if it was, it wasn't in the 5/51/44 mix of MAW120, and/or they did a poor job of managing your money. And as Spudd says, past performance is no assurance of future performance. I expect future returns to be somewhat less than the past.



Thanks AltaRed
You verify the feedback from Spudd and this adds to my confidence. I will play with the tools you linked in your comment.
Thanks again. Much appreciated


----------



## GreatLaker (Mar 23, 2014)

Welcome back.

1) You are thinking the right way especially if you are not getting much advice from Assante, or don't feel you need them as retirees with your money needs covered by pensions.

2) Mawer is a great fund company and Mawer Global has had good returns. It is a global fund that invests globally in large and small companies in developed and developing markets. Personally, as a retiree that does not have pensions I would not invest all my money in one fund or one fund company. Your situation is obviously different. MAW120 dropped 25% in the crashdemic in Feb and March, and took 8 months to recover. Your $350k would have dropped to about $260k. And 2008 was a deeper crash that took longer to recover. If you want less risk of volatility consider one of Mawer's Balanced funds. Or if you are concerned about having all your funds with one fund company consider splitting it 50% in Mawer 120 and 50% in an asset allocation equity ETF like VEQT or XEQT. There are no perfect answers, and lots of sensible ones.

3) Assuming you mean TD Direct Investing and not TD Wealth, the rep will not offer investment advice. They should open accounts and process the form that goes to Assante to do a registered transfer. They will ask if you want to transfer in cash or in kind, and comment on what type of investments may or may not be transferrable. They may provide some support on how to manage your account and answer your questions. They may point you in the direction of some TD learning resources and webinars to help you start. But that's about it. 

On that note you need to understand what you have at Assante, if it can be transferred or sold, and any costs to do so. Most investment firms have a fee to transfer a registered account out. If you have funds with a Deferred Sales Charge (DSC) there will be a fee to sell them, that declines over time. Do you have any GICs or insurance products or annuity products? Assante loves to sell that stuff and it may be a PITA to sell or transfer out.

4) MAW120's 10 year return is 14%, compared to its global benchmark of 12.2%. But future returns are highly dependent on what the market does. And comparison to your Assante accounts is only relevant if they have similar investments and risk level. 

5) Read the blog stuff on Mawer's website to understand their investing philosophy. Read the financial planning an portfolio design sections on Finiki. Recognize that you cannot predict the future or control the market, so concentrate on things you can control: consistent, diversified, low cost investments, resisting the temptation to tinker or bail out due to market volatility.
finiki, the Canadian financial wiki
Portfolio design and construction - finiki, the Canadian financial wiki


----------



## Money172375 (Jun 29, 2018)

Agreed. Be sure there are no DSCs at Asante or other “exit” fees. I’ve been on the wrong side of that conversation when customers yelled at me for the fees charged by OFIs.

check out the TD promotion and see if you qualify. TD Direct Investing Offer | TD Canada Trust – TD Bank Group


----------



## MrMatt (Dec 21, 2011)

Retired1 said:


> Thanks Mr Matt
> I have contacted a TD advisor. Her resume includes a degree in electrical engineering. I’m going to conclude that she is above average.
> 
> I may still search for a fee only advisor to help me get set up. At a minimum I would expect to stop paying Assante their MER and still maintain or improve our results.
> ...


As an Engineer, I don't think it's a good idea to assume someone with a degree in electrical engineering is going to be above average.
While I think Engineers can be excellent accountants (I know several that are both), I don't think it's automatic.

Also some of the worst people to manage money I know are educated professionals.


----------



## AltaRed (Jun 8, 2009)

Retired1 said:


> I have contacted a TD advisor. Her resume includes a degree in electrical engineering. I’m going to conclude that she is above average.


This part keeps confusing me. A TD wealth(?) advisor is not associated with TD DI (discount brokerage). If this person is a financial advisor at a TD branch, she will help you get set up with a TDDI account and transfer forms but she is NOT going to advise on investments unless she has a client relationship with you along with KYC form, and if she does that, then you have a relationship with TD Asset Management (or similar), not TDDI.

You cannot use these terms in a casual manner. They are very specific and distinct things.


----------



## hfp75 (Mar 15, 2018)

Td advisors are gonna sell you td products...

Your whole goal is to keep your own money DIY. 
I like and use MAW120 also. Its a portion of my equity allocation. Mawer is an excellent firm !

I think you should read about portfolio construction..... you will realize that at your age, 100% equities is not a smart idea.... you need a few different asset classes to meet your goals safely.

I also think that you could consider using something like MAW120 (50%) / VAB (40%) / MNT (10%) it would provide a good return and a lower standard deviation.... i dont know your age but your retired so id be hesitant to allocate more to equities.... the folks here can help with allocation and discussion & you can save your cash... 

Once your committed on your portfolio, then call your current investment firm and find out your sales charges, as a lot of private firms have you comitted for multiple years and your gonna pay to leave.... transfer the unpenalised cash to money market....

go get a discount broker, doesnt have to be a major bank - doesnt matter though. But check ahead as some dont sell mawer funds cause mawer doesnt pay the broker kick-back like other funds do.

then transfer your moneymarket holdings to your broker and buyyou portfolio...

free - no fees

next year go get the un comitted cash again from your current investment firm...

these dsc are a ponzi scheme !!!


----------



## AltaRed (Jun 8, 2009)

The OP and spouse has more than enough in CPP/OAS/DB pensions than they are spending (still saving $2500/month). 

It would seem the portfolio will mostly be a legacy (or late life critical care as well). IF so, then 100% equities is quite all right...provided the OP won't panic on a major market downturn. That is something the OP has to look in the mirror and decide.


----------



## Retired1 (Dec 28, 2020)

GreatLaker said:


> Welcome back.
> 
> 1) You are thinking the right way especially if you are not getting much advice from Assante, or don't feel you need them as retirees with your money needs covered by pensions.
> 
> ...




Thanks GL.
I was hoping to hear from you! 

I think we are ready for market drops. Although they are scary events, we have used them as opportunities to do cash dumps in our portfolios. Again, we don’t need this money for living or travelling. We would never sell in a market drop. This is when we buy. 

We don’t have any DSC’s at assante or any GIC’s etc. Everything is FE. 

I/we need to think about your tips for diversification. You have provided good information to start the discussion.

Your advice is better than anything I get from Assante! Thanks so much.


----------



## Retired1 (Dec 28, 2020)

AltaRed said:


> The OP and spouse has more than enough in CPP/OAS/DB pensions than they are spending (still saving $2500/month).
> 
> It would seem the portfolio will mostly be a legacy (or late life critical care as well). IF so, then 100% equities is quite all right...provided the OP won't panic on a major market downturn. That is something the OP has to look in the mirror and decide.



Thanks AltaRed
Your summary of our position is accurate. Our investment horizon is 30 years (God willing!). I am mindful of the risks. 

I remember someone saying “the first rule is don’t lose money”. But, the boring Mawer approach makes me feel like I’m investing rather than trading.


----------



## Retired1 (Dec 28, 2020)

hfp75 said:


> Td advisors are gonna sell you td products...
> 
> Your whole goal is to keep your own money DIY.
> I like and use MAW120 also. Its a portion of my equity allocation. Mawer is an excellent firm !
> ...



Thanks Hpf!
I did a quick look at my TFSA money. It is all Front End. I don’t see any DSC. It’ll be a bit tense moving everything after such a long time. But I can’t see giving Assante over 2% of my investments annually for the next 30 years.


----------



## Retired1 (Dec 28, 2020)

AltaRed said:


> This part keeps confusing me. A TD wealth(?) advisor is not associated with TD DI (discount brokerage). If this person is a financial advisor at a TD branch, she will help you get set up with a TDDI account and transfer forms but she is NOT going to advise on investments unless she has a client relationship with you along with KYC form, and if she does that, then you have a relationship with TD Asset Management (or similar), not TDDI.
> 
> You cannot use these terms in a casual manner. They are very specific and distinct things.



Thanks AltaRed 
Sorry for the confusion. The TD person is a financial advisor. I understand that I am not rly for a wealth advisor until my portfolio goes over 500K


----------



## Retired1 (Dec 28, 2020)

MrMatt said:


> As an Engineer, I don't think it's a good idea to assume someone with a degree in electrical engineering is going to be above average.
> While I think Engineers can be excellent accountants (I know several that are both), I don't think it's automatic.
> 
> Also some of the worst people to manage money I know are educated professionals.


Thanks Mr Matt
I will proceed with caution (unless we end up talking about engineering)


----------



## Retired1 (Dec 28, 2020)

Money172375 said:


> Agreed. Be sure there are no DSCs at Asante or other “exit” fees. I’ve been on the wrong side of that conversation when customers yelled at me for the fees charged by OFIs.
> 
> check out the TD promotion and see if you qualify. TD Direct Investing Offer | TD Canada Trust – TD Bank Group



Thanks Money
I don’t see any DSC’s in my portfolio but I will proceed with caution


----------



## MrBlackhill (Jun 10, 2020)

Retired1 said:


> 4) At Assante we have had an annualized return of 6.88% since 2011. What should I expect from Mawer Global Equity going forward?


What is the goal of this question?

Let's just put things into perspective. From 2011 to present day, there was no big crash. 2020 is fully recovered, it was just a joke and a stress-test for investors. You said Assante delivered 6.88%. First, how is that performance calculated? Second, which Assante fund was it? So we can compare apples with apples. Because Mawer Global Equity delivered 13.8% during the last 10 years. And the Mawer balanced funds delivered about 9%. But the past 10 years were very bullish.

Third, again, what is the goal of the question?

Do you have a target performance? Do you want to be sure Mawer performs well? Yes, it does.

If you think you won't ever need that money, and if you think it'll be invested for at least the next 30 years, then going all global equity is definitely a good option, in my opinion. You can expect 7% over 30 years. Unless you check your portfolio status during crashes. Unless you believe there will be WW3 between US and China. But go global as you suggested, and don't go all US.


----------



## james4beach (Nov 15, 2012)

Retired1 said:


> The investment money is not needed for living expenses and so it is likely to be a legacy for our adult children. As our accounts with Assante are over 350K the MER “hit” is even more apparent.
> 
> Our objective is to move this money to TD direct. We are interested in Mawer Global equity. I understand that Mawer is another mutual fund. However, I am not a confident investor (yet). The Mawer MER is significantly less.
> 
> 1) Am I on the right track?


Absolutely, I think you're on the right track. The MAW120 has an MER 1.3% and no other fees, so that's probably less than you're paying at Assante. I think it's a reasonable MER for a good quality global equity fund.

As others have pointed out, this is a pure equity fund (no bonds) so make sure that's what you want.



Retired1 said:


> 4) At Assante we have had an annualized return of 6.88% since 2011. What should I expect from Mawer Global Equity going forward?


Others have talked about some backwards-looking returns, but I'll answer this another way, with a forward-looking estimate.

Because it's globally diversified equity, the long term performance of the fund may be similar to how global equities have performed historically, minus the MER.

The last report I saw from Credit Suisse's long term (100+ year) study showed that global equities have roughly 5% annual "real return", meaning after inflation. Take off the MER and you'd be looking at *roughly 4% real return*.

If inflation stays at roughly 2%, that would mean roughly 6% annual return. The big caveat here is that this is a very long term expectation (like over 50 years!) and over shorter time spans, such as a decade or two, the performance could be wildly different. It could be much higher, or lower.

But I think 4% real return is a reasonable guess.


----------



## Retired1 (Dec 28, 2020)

MrBlackhill said:


> What is the goal of this question?
> 
> Let's just put things into perspective. From 2011 to present day, there was no big crash. 2020 is fully recovered, it was just a joke and a stress-test for investors. You said Assante delivered 6.88%. First, how is that performance calculated? Second, which Assante fund was it? So we can compare apples with apples. Because Mawer Global Equity delivered 13.8% during the last 10 years. And the Mawer balanced funds delivered about 9%. But the past 10 years were very bullish.
> 
> ...



Thanks Mr Blackhill
My point was to gather your estimation of what return to expect (roughly) over the next 30 years. You ballpark market returns going forward at 7%. 
This helps me to decide if my proposed move to TD Direct using Mawer is worth it. 

When I think about the quality feedback people have provided here I feel that my move from Assante to Mawer makes good sense.

Becausei we don’t need the money for living or travel and we are in for about 30 years; then we will go all in on Mawer Global Equity. If my wife is too nervous then we will split our money between Mawer Global Equity and Mawer Balanced.

Thanks again!


----------



## dubmac (Jan 9, 2011)

Reality has bitten MAWER funds, pretty much across the spectrum. see YTD returns here.
TSX is down -9% YTD, MAW104 down -17%


----------



## cainvest (May 1, 2013)

dubmac said:


> Reality has bitten MAWER funds, pretty much across the spectrum. see YTD returns here.
> TSX is down -9% YTD, MAW104 down -15%


The same for all similar funds, VBAL down -16% YTD, XGRO -17%, etc, etc


----------



## james4beach (Nov 15, 2012)

cainvest said:


> The same for all similar funds, VBAL down -16% YTD, XGRO -17%, etc, etc


Yup, it's pretty much as expected. Mawer had a slightly higher equity weight, and also had more "growth" stock exposure, which contribute to slightly greater YTD declines.

Now comes the hard part... sticking with the investment over the long term.


----------



## pedanticus (Apr 30, 2014)

dubmac said:


> Reality has bitten MAWER funds, pretty much across the spectrum. see YTD returns here.
> TSX is down -9% YTD, MAW104 down -17%


Still my worst performing asset. I've been buying since 2016 and I'm currently sitting at a loss. I guess overweighting technology stocks and assuming oil is dead is their idea of "being boring and making money."

It's a tiny part of my investable assets, thankfully. Nothing to do now but ride it out and try not to be too annoyed with myself for buying this trash.


----------



## james4beach (Nov 15, 2012)

pedanticus said:


> It's a tiny part of my investable assets, thankfully. Nothing to do now but ride it out and try not to be too annoyed with myself for buying this trash.


It's not trash just because it has poor recent performance.


----------



## londoncalling (Sep 17, 2011)

I would agree. How did it perform prior to 2022? I imagine you were not sitting at a loss last year at this time.


----------



## pedanticus (Apr 30, 2014)

Sure wasn't. And my actual "boring" investments are still doing fairly well too.


----------



## james4beach (Nov 15, 2012)

londoncalling said:


> I would agree. How did it perform prior to 2022? I imagine you were not sitting at a loss last year at this time.


They performed great prior to 2022. And I think it's a good idea to compare to PH&N Balanced Fund, another diversified balanced fund with the same MER.

Morningstar page on Mawer Balanced
Morningstar page on PH&N Balanced
Over 1 year and 3 years, the Mawer fund is now underperforming PH&N. But look longer term:

*Over 10 years:*
Mawer 7.20%
PH&N 6.89%

*Over 15 years:*
Mawer 5.99%
PH&N 4.99%


----------



## dubmac (Jan 9, 2011)

As cainvest mentions, MAW104 is about the same as VBAL, XBAL etc. same drop-17%
VBAL and XBAL are passive ETF's that set and forget. No advisor is involved - (unless there is a big change in asset allocation, which would necessitate rebalancing.)
To call MAW104 trash, would be to call VBAL and XBAL trash as well. I think it may be more appropriate to suggest that there is limited to no advantage from their advisors. stock-picking & selling has not been their advantage - recently, they simply appear rather average given VBAL and XBAL's performance.....

....also, VBAL has only been in existence for around 2 years, MAWER can still boast around 6% return (annual I presume) over 15 years, which captures returns through 2008-09.


----------



## james4beach (Nov 15, 2012)

dubmac said:


> ...also, VBAL has only been in existence for around 2 years, MAWER can still boast around 6% return (annual I presume) over 15 years, which captures returns through 2008-09.


That's right. Mawer's managers might not be adding value (that's possible) but yes they did achieve 6% annualized since 2007. That means that even with the market crash and covid crash in there, they got 6% CAGR over the whole period ... which is a pretty good return on a balanced fund.

We can also compare Mawer to the gold standard American balanced fund: Vanguard's VBIAX, their flagship balanced fund, with only 0.07% fee.

The 15 year return of Vanguard's VBIAX is 6.16% which is more or less the same as Mawer Balanced.

And by the way VBIAX is also down 20% YTD. But that should help alleviate anyone's concern that Mawer is doing badly. Their performance is just as good as the lowest fee, best index-based balanced fund from Vanguard.


----------



## james4beach (Nov 15, 2012)

This also might alleviate the concerns of Mawer Balanced fund investors...

I started my own portfolio (which is a lot like a balanced fund) in March 2016. My portfolio has handled the market downturn reasonably well. I use only low cost ETFs so my fees are super low. Here is the annualized performance going back to when I started

4.41% CAGR for Mawer Balanced
4.66% CAGR for my own "balanced fund"

That's pretty close. Mawer's performance has been just 0.25% annually less than mine, which is kind of within a noise threshold. Plus I have rock bottom fees. I'm really happy with my portfolio (it's the best I could do) and as you can see, Mawer is performing about the same!


----------

