# Good balanced funds (one-size-fits-all)



## james4beach (Nov 15, 2012)

I know that many of us have ETF or individual stock portfolios, but friends and family frequently ask me about simpler fund options. This might be the kind of thing suitable for a retiree or someone wanting to build savings without spending too much time managing the portfolio themselves. Maybe we can list some good, generic balanced funds we're aware of. Some criteria:

- single fund
- around 50/50 or 60/40 asset allocation
- low MER
- diversified with Canada plus foreign exposure
- diversified sector exposure (not very heavy in a specific sector)
- ideally, a long track record

Different brokerages will give access to different funds, and different minimum purchase amounts apply, so I think it's useful to list several options.


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## james4beach (Nov 15, 2012)

Mawer Balanced Fund (MAW104)
MER 0.92%. Allocation is 17% Canada, 41% foreign. The 10 year return is 8.06% cagr, far above average for global balanced funds. Available through TDDI.

Tangerine Balanced Portfolio (INI120)
MER 1.07%. Allocation is 18% Canada, 42% foreign. The 10 year return is 5.24% cagr.

BMO Monthly Income, Series D (GGF31148)
MER 1.02%. Allocation is 32% Canada, 26% foreign. This is a newer low cost series so you can look at performance of the parent fund and add +0.55% cagr return due to MER drop. That puts 10 year return at 5.63% cagr and 15 year return at 6.52% cagr. Available through TDDI.

Vanguard VBAL
MER 0.25% (estimated). Allocation is 18% Canada, 42% foreign. This is a new fund and doesn't yet have a track record, but presumably it would perform similarly to something like Tangerine but with a lower cost, and theoretically, higher performance. Available through all discount brokerages since it's an ETF.


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## jargey3000 (Jan 25, 2011)

good thread!
james - what about your old favorite RBF448, i think...?


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## AltaRed (Jun 8, 2009)

Check out Beutal Goodman, Leith Wheeler, etc. as well. Don't know what they have but they operate on a similar model to Mawer.


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## Beaver101 (Nov 14, 2011)

Would it be a good idea to hold these funds perpetually, like set it and really forget it?


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## agent99 (Sep 11, 2013)

If the funds are to be used to invest incremental income on an on-going basis, fees need to be considered. ETFs incur a trading fee each time they are purchased at most brokerages. Mutual funds usually have no trading fee, but have higher MER. Need to determine what suits your particular situation.


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## james4beach (Nov 15, 2012)

jargey3000 said:


> good thread!
> james - what about your old favorite RBF448, i think...?


True, I did mention this one before:

RBC Monthly Income, Series D (RBF1006). MER is just 0.88%. The 15 year performance has been quite good at 6.7% annualized. The reason I did not list this one is that it's almost exclusively Canadian equities (37%) with just a tiny bit of US (8%) but no international. This is basically a pure Canadian fund, so it may not be appropriate as a single one-size-fits-all holding. It's still a good Canadian balanced fund though and is available through RBCDI and TDDI.

Compared to that, I prefer the BMO Monthly Income as it has better geographic diversification: 32% Canada, 15% US, 11% international. Although it's also Canada-focused, it has more foreign diversification. Its sector diversification is also better than the RBC one.


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## james4beach (Nov 15, 2012)

Beaver101 said:


> Would it be a good idea to hold these funds perpetually, like set it and really forget it?


Yes, I think so. As long as it's a well established fund with a low fee and good diversification, I think you can more or less forget about it. If you're adding to savings and building up capital, just remember to automatically reinvest distributions. Also remember that since these are stock-based investments, they should be held for several decades. It wouldn't be surprising to see a 10 year stretch with poor returns... this has certainly happened before.



agent99 said:


> If the funds are to be used to invest incremental income on an on-going basis, fees need to be considered. ETFs incur a trading fee each time they are purchased at most brokerages. Mutual funds usually have no trading fee, but have higher MER. Need to determine what suits your particular situation.


Good point, and each person's situation will be different. For example, my friend was looking for something to hold within a TDDI RESP and regularly add small contributions. Though MAW104 is a great fund, it has a 5K minimum investment so it's not suitable for her. Tangerine is not available in TDDI. The VBAL trade fee makes it unsuitable for small incremental purchases. So in her case, BMO Monthly Income is the only viable option... $500 initial, with $50 additional purchases.


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## fatcat (Nov 11, 2009)

i have always liked philips hager and north for their bond funds and they also have some good balanced funds

https://www.phn.com/funds


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## rsal59 (Dec 2, 2016)

agent99 said:


> ETFs incur a trading fee each time they are purchased at most brokerages. Mutual funds usually have no trading fee, but have higher MER. Need to determine what suits your particular situation.


I guess this depends on the brokerage. Questrade doesn’t charge you for trading ETFs while it does for MF while TD is the opposit.


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## Speculator (May 9, 2018)

I bought MAW104 for my wife`s LIRA for all of those above reasons but more specifically, should something happen to me she could manage the fund.
https://bit.ly/2JZsZmC


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## newfoundlander61 (Feb 6, 2011)

My only holding in my TFSA is the Mawer Balanced Fund MAW104. I have had it for 4 years now and plan on holding in going forward.


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## agent99 (Sep 11, 2013)

newfoundlander61 said:


> My only holding in my TFSA is the Mawer Balanced Fund MAW104. I have had it for 4 years now and plan on holding in going forward.


MAW104 has a good record. But it has a very low distribution. Not so good for retirees who need a steady flow of income. It would require selling of units for income. And I wouldn't risk having to do that if starting out at what may be a near top of a bull market.


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## AltaRed (Jun 8, 2009)

agent99 said:


> MAW104 has a good record. But it has a very low distribution. Not so good for retirees who need a steady flow of income. It would require selling of units for income. And I wouldn't risk having to do that if starting out at what may be a near top of a bull market.


Let's not start the argument again how one gets capital out of an asset, i.e. that with some market price inflections aside from time to time, it should make no difference whether it is by distribution, or by selling units. A dollar is a dollar is a dollar. It just feels different. 

Managed payout funds by the various industry players provide a steady stream of income and it is not transparent to the investor where it comes from, e.g. income stream within the fund, selling assets, or some combination. Just like a managed payout fund, when I take capital out of my portfolio every month to fund my living expenses, I should only be looking at the effect at the bottom line of portfolio value, not necessarily from where within the alphabet soup the capital came from. Yes...yes, I know, market pricing on any given day is not necessarily a true indication of 'enterprise' value.

Added: We like to feel in control, with hands on the steering wheel, is the real difference. Us type A's will not do well in driverless cars.

Added2: I also have MAW104 in my TFSA. It is one of 2 holdings and will soon become the only holding.


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## agent99 (Sep 11, 2013)

AltaRed said:


> Let's not start the argument again how one gets capital out of an asset,


You just did! 

I think I explained briefly why I would not buy MAW104 *now* if I wanted to use it as a source of income. Not everyone wants to or has to sell assets for income purposes.



> Added2: I also have MAW104 in my TFSA. It is one of 2 holdings and will soon become the only holding.


That's probably a good place for MAW104 if TFSA is only a place to accumulate funds to leave to charity or heirs. Or maybe use in dire circumstances. 

I don't own mutual funds. I have sometimes considered MAW104, but I like to see dividend cash flow - not rely on market growth that may or or may not happen in our limited future. But could be good for those in accumulation stage who are still too busy at their jobs to pay attention to their investments.


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## Beaver101 (Nov 14, 2011)

AltaRed said:


> Let's not start the argument again how one gets capital out of an asset, i.e. that with some market price inflections aside from time to time, it should make no difference whether it is by distribution, or by selling units. A dollar is a dollar is a dollar. It just feels different.
> 
> Managed payout funds by the various industry players provide a steady stream of income and it is not transparent to the investor where it comes from, e.g. income stream within the fund, selling assets, or some combination. Just like a managed payout fund, when I take capital out of my portfolio every month to fund my living expenses, I should only be looking at the effect at the bottom line of portfolio value, not necessarily from where within the alphabet soup the capital came from. Yes...yes, I know, market pricing on any given day is not necessarily a true indication of 'enterprise' value.
> 
> ...


 ... I'm confused. I thought MAW104 is supposedly be a hands-off investment?


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## AltaRed (Jun 8, 2009)

Beaver101 said:


> ... I'm confused. I thought MAW104 is supposedly be a hands-off investment?


MAW104 is a 'hands off' investment. I used the proverbial 'Us Type A's' as a psychological way to soften my pointed remark about Type A personalities, but it obviously came off with mixed messages. 

FWIW, I target my Type A personality to stock picking the Canadian market in my non-reg account. I purposely passively index the ex-Canada part of the portfolio and fringe accounts like the TFSA. Simply don't care to bite off too much effort.


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## james4beach (Nov 15, 2012)

AltaRed said:


> Check out Beutal Goodman, Leith Wheeler, etc. as well. Don't know what they have but they operate on a similar model to Mawer.


Thanks for the pointer to BG.

Beutel Goodman Balanced (BTG772) with MER 1.20% looks really good. It's Canada-heavy with a similar allocation to BMO's ... 33% Canada, 35% international, but has done much better than the BMO one despite the higher MER: the 15 year return is 7.22% cagr.

I noticed that its 2008 loss was only -11% versus -17% to -20% for the balanced fund category. I suspect that the management did something (likely de-risking) to soften the loss. Together with the consistent outperformance I don't think this can be accidental... the management seems to be quite sharp, and is adding value.

Unless I'm missing something, this fund looks a real champ.

It's available at TDDI but beware that there is a front-end load through some brokerages. I believe there is no load at TDDI but I've never bought one of the BGs, so I'm not sure. Definitely look into this before considering buying.


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## agent99 (Sep 11, 2013)

AltaRed said:


> Added2: I also have MAW104 in my TFSA. It is one of 2 holdings and will soon become the only holding.


Isn't there a withholding tax on part of the distributions? Can't recover it in TFSA. How does that affect overall return?


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## newfoundlander61 (Feb 6, 2011)

Good point about the distribution.


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## james4beach (Nov 15, 2012)

fatcat said:


> i have always liked philips hager and north for their bond funds and they also have some good balanced funds
> 
> https://www.phn.com/funds


Good suggestion. Here's a good looking one:

PH&N Balanced D Series (PHN350 or RBF1350) and I think those two codes refer to the same fund. MER is only 0.88%. This is also Canadian heavy but still diversified with 29% Canada, 16% US, 14% international. 15 year performance is good, very similar to the BMO one overall in allocation and performance.


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## james4beach (Nov 15, 2012)

Another BMO one that's even better diversified globally, and very attractive I think.

BMO Balanced ETF Portfolio D Series (GGF31703). MER is 0.90%. This one is _very_ interesting, it just holds ETFs. It's the same concept as Vanguard VBAL except this one already has 3 years track record and $2 billion in assets, and it's proving that it can outperform the index. 18% Canada, 22% US, 19% international. Has $500 minimum and $50 additional.

I think this is very interesting because it's the same concept as VBAL, but with a track record, and has low minimums appropriate for smaller purchases. From the balanced mutual funds I've seen, this would probably be my top pick so far after MAW104.


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## agent99 (Sep 11, 2013)

fatcat said:


> i have always liked philips hager and north for their bond funds and they also have some good balanced funds
> 
> https://www.phn.com/funds


I used to own some PH&N funds early on. But then they were taken over by RBC, so other than the name, they are now really RBC funds. I can't recall exactly why, but I got rid of them. Maybe because I eliminated most mutual fund holdings when I went to on-line brokerage.


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## james4beach (Nov 15, 2012)

james4beach said:


> BMO Balanced ETF Portfolio D Series (GGF31703). MER is 0.90%. This one is _very_ interesting, it just holds ETFs.


Adding a comment on this one. This ETF based portfolio doesn't have much of a track record yet, so it might not be as attractive as I first thought. The prospectus does not lock in fixed allocations but says they might change over time strategically, making this an actively managed fund, so I think it remains to be seen how well they will manage it longer term.

Overall though, I'm happy to see that there are actually some good generic mutual funds out there at 1% of even lower MER. Several fund companies too, available through various means (including discount brokerages), many with 15+ year track records. Depending on your needs for minimum/incremental purchases and preference for Canada-heavy or more international, lots of options here.


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## dubmac (Jan 9, 2011)

comparison among the 4 listed in the above - (I didn't add VBAL in this case - it needs more time)
https://www.vanguardcanada.ca/indiv...ctedFund2=F0CAN05MV0&selectedFund3=F00000T410
When you look at Equity Characteristics I still give the top spot to MAW104, but must admit PH&N Bal is good. 
I don't think that I can buy PH&N products - they don't show up as choices through my dealer.


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## laserfan (Jul 19, 2018)

My mutual fund is with Steadyhand. I'm in their Founders Fund. I had hoped to switch to Mawer104 once I broke the 50 grand plateau, but...

"Mawer Investment Counselling requires a minimum of $250,000 per account.
Mawer Mutual Funds can be purchased via an investment advisor or through a discount brokerage for a minimum of $5,000 per fund, per account.
Please note that we are no longer accepting new clients into Mawer Direct Investing Ltd."

I don't have an advisor or brokerage account and don't want to incur fees in order to fund a Mawer mutual fund. Too bad. 

I went with Steadyhand to begin with, because their minimum to deal directly with them is $10,000. Since inception, I've averaged a 5.7% return after fees. Not really that great....


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## PharmD (Dec 21, 2011)

I would add two other balanced funds to the list:

1. NBI Jarislowsky Fraser Select Balanced. E series is the equivalent of most companies D series and has an MER of 0.89%. As the name suggests it is managed by Jarislowsky Fraser. My only concern is if anything will happen to this fund now that BNS owns Jarislowsky Fraser.

2. Leith Wheeler Balanced. Leith Wheeler runs a similar business to Mawer and Steadyhand, but focus on the value investment style. Value investing has underperformed for a significant amount of time recently which is reflected somewhat in this fund, but eventually value will come back into favour.

I cant help but think that Mawer is being faced with a lot of clients who are performance chasing. It can be challenging when they have inevitable periods of underperformance if a lot of the weak hands sell out.

As for Steadyhand I have invested the majority of my wealth with them for over 5 years and have seen returns above the index as well as had great support and advice. That being said the Founders Fund has more room for changes to the asset allocation than most balanced funds and that may not be for everyone. I am not primarily invested in the Founders Fund.

My only advice would be to not chase short-term performance. You need to look at the full market cycle and remember that no style of investing outperforms at all times.


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## Spudd (Oct 11, 2011)

laserfan said:


> My mutual fund is with Steadyhand. I'm in their Founders Fund. I had hoped to switch to Mawer104 once I broke the 50 grand plateau, but...
> 
> "Mawer Investment Counselling requires a minimum of $250,000 per account.
> Mawer Mutual Funds can be purchased via an investment advisor or through a discount brokerage for a minimum of $5,000 per fund, per account.
> ...


With 50k you shouldn't pay fees to have MAW104 in a brokerage account. Some brokerages charge maintenance fees below a certain balance threshold but I think that threshold is like 25k for most brokers. And most brokers don't charge commission to buy/sell mutual funds. I know this is true for TD as they are my broker, not sure for others - but you should be able to easily check and find out.


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## AltaRed (Jun 8, 2009)

Spudd said:


> With 50k you shouldn't pay fees to have MAW104 in a brokerage account. Some brokerages charge maintenance fees below a certain balance threshold but I think that threshold is like 25k for most brokers. And most brokers don't charge commission to buy/sell mutual funds. I know this is true for TD as they are my broker, not sure for others - but you should be able to easily check and find out.


I agree but one has to be careful which discount brokerage will actually carry (sell you) Mawer mutual funds since they do not pay trailer fees, etc. RBC DI won't probably because of competition with their own PH&N funds but that is just my speculation. Scotia iTrade will sell you Mawer mutual funds.


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## laserfan (Jul 19, 2018)

AltaRed said:


> I agree but one has to be careful which discount brokerage will actually carry (sell you) Mawer mutual funds since they do not pay trailer fees, etc. RBC DI won't probably because of competition with their own PH&N funds but that is just my speculation. Scotia iTrade will sell you Mawer mutual funds.


If you only use a brokerage account strictly to buy units of a Mawer mutual fund, wouldn't there be a monthly account maintenance fee? If you aren't trading, how would they make money from you? I'm a novice by the way....


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## AltaRed (Jun 8, 2009)

laserfan said:


> If you only use a brokerage account strictly to buy units of a Mawer mutual fund, wouldn't there be a monthly account maintenance fee? If you aren't trading, how would they make money from you? I'm a novice by the way....


As long as you meet the minimum account size, there are no monthly account maintenance fees even if you do not make a single additional trade year upon year. You would be the kind of customer they don't like, but they have many frequent traders blowing their brains out making trades, to make up for those that don't trade. It is just the way it is.

I have been retired 12 years and rarely make trades other than to sell an asset for cash flow needs. This year so far, I have made 3 trades in my non-reg account to sell a few preferred stocks to fund a luxury vacation and I puchased 1 GIC in my RRSP to replace a maturing GIC. I only expect to make 2 more trades this year, one each to fund another luxury vacation and a maturing GIC. They will have gotten $40 from me in the non-reg account trades and 25bp (about $150 in GIC commission from the issuer) to replace maturing GICs. Next year, it will likely be less since I will most likely not need to sell any non-reg assets.


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## Spudd (Oct 11, 2011)

laserfan said:


> If you only use a brokerage account strictly to buy units of a Mawer mutual fund, wouldn't there be a monthly account maintenance fee? If you aren't trading, how would they make money from you? I'm a novice by the way....


They get a trailer fee from the mutual fund company.


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## cainvest (May 1, 2013)

laserfan said:


> If you only use a brokerage account strictly to buy units of a Mawer mutual fund, wouldn't there be a monthly account maintenance fee? If you aren't trading, how would they make money from you? I'm a novice by the way....


Typically there is no maintenance fee if your balance in all your accounts is large enough.


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## AltaRed (Jun 8, 2009)

Spudd said:


> They get a trailer fee from the mutual fund company.


Mawer does not pay trailer fees to brokerages. Believe that is also the case with Beutal Goodman, Leith Wheeler, and perhaps a few others.


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## laserfan (Jul 19, 2018)

Well, it may be another year before I hit the 50 grand level anyway. Thanks for all the feedback guys! I will likely stick with my current strategy of building up my Steadyhand mutual fund. I like the simplicity of PAC investing with them.


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## Spudd (Oct 11, 2011)

AltaRed said:


> Mawer does not pay trailer fees to brokerages. Believe that is also the case with Beutal Goodman, Leith Wheeler, and perhaps a few others.


Interesting. Maybe that's why some brokerages refuse to sell their funds.


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## hfp75 (Mar 15, 2018)

Spudd said:


> Interesting. Maybe that's why some brokerages refuse to sell their funds.


Correct & I left RBC because of this....


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## dubmac (Jan 9, 2011)

AltaRed said:


> Mawer does not pay trailer fees to brokerages. Believe that is also the case with Beutal Goodman, Leith Wheeler, and perhaps a few others.


That's one of the reasons why I like Mawer. Their mgmt seem to be less complicit and not influenced by the fees fiasco applied by the MF industry. At the least they have more principles than most of the MF dealers, and especially, advisors in the industry. JMO


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## james4beach (Nov 15, 2012)

Thought I'd post some YTD numbers (December 21) for the mutual funds mentioned earlier in this thread. Most of them don't look so bad and seem to be doing a good job with their diversified portfolios

Mawer Balanced Fund, -2.09%
BMO Monthly Income D Series, -3.03%
BMO Balanced ETF Portfolio D Series, -4.03%
Tangerine Balanced Portfolio, -4.28%
Beutel Goodman Balanced D Series, -5.36%
PH&N Balanced D Series, -6.52%


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## like_to_retire (Oct 9, 2016)

BMO appears to be getting into the asset allocation type balanced ETF's.

ZGRO - Growth
ZBAL - Balanced
ZCON - Conservative
ZMI - Monthly Income.

BMO certainly has a lot of ETF's now.

ltr


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## AltaRed (Jun 8, 2009)

BMO had to respond to iShares for the simple reason BMO is 2nd largest in Canada in terms of AUM and have been chipping away at iShares lead. They cannot be left behind in this horse race.


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## lonewolf :) (Sep 13, 2016)

james4beach said:


> I know that many of us have ETF or individual stock portfolios, but friends and family frequently ask me about simpler fund options. This might be the kind of thing suitable for a retiree or someone wanting to build savings without spending too much time managing the portfolio themselves. Maybe we can list some good, generic balanced funds we're aware of. Some criteria:
> 
> - single fund
> - around 50/50 or 60/40 asset allocation
> ...


 This type of fund would have both positives & negatives. A big negative I see if one asset class goes to zero balancing would wipe the fund out. The more asset classes the greater the chance of an asset going to zero.

Like a poker game every table is the same the money flows to the strong hand or hands the majority will lose a balanced fund is no different


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## Thal81 (Sep 5, 2017)

And BMO's new portfolio ETFs are priced at 5 basis points under the competition... They sure know how to enter the market!


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## james4beach (Nov 15, 2012)

james4beach said:


> PH&N Balanced D Series (PHN350 or RBF1350) and I think those two codes refer to the same fund. MER is only 0.88%. This is also Canadian heavy but still diversified with 29% Canada, 16% US, 14% international. 15 year performance is good, very similar to the BMO one overall in allocation and performance.


This PH&N Balanced Fund (D Series) consistently shows excellent performance. It also allows a small initial $500 purchase, which is very nice.

The morningstar page shows it as "High" risk versus category. Does anyone know why? Looks like a standard 60/40 allocation to me.


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## cainvest (May 1, 2013)

james4beach said:


> The morningstar page shows it as "High" risk versus category. Does anyone know why? Looks like a standard 60/40 allocation to me.


Best guess, probably has higher volatility than their versus category ...


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## james4beach (Nov 15, 2012)

james4beach said:


> BMO Monthly Income, Series D (GGF31148)
> MER 1.02%. Allocation is 32% Canada, 26% foreign. This is a newer low cost series so you can look at performance of the parent fund and add +0.55% cagr return due to MER drop. That puts 10 year return at 5.63% cagr and 15 year return at 6.52% cagr. Available through TDDI.


I recently helped a family member calculate some performance stats on their own "balanced" ETF portfolio. It was an interesting experience that reminded me of the added value of mutual funds and professional management. Their start date was late 2007, immediately before the market crash. Worst possible entry.

This person held various ETFs, vaguely 60/40. However (as many of us have done) this person avoided regular bond funds out of fear of rising interest rates, instead using short term bonds. This resulted in a big performance loss -- _attempting to time the market_. Additionally they did not rebalance between stocks/bonds over time.

Their performance since starting in late 2007 was 4.7% CAGR which is pretty good, actually the same as pure Canadian stocks. Given their Canadian emphasis this seems about right.

Then out of curiosity I calculated the return of BMO Monthly Income for the same time period, as it's also heavy in Canada. It's 5.1% for the high MER version and *5.6% CAGR* for the low fee D series version.

So this mutual fund, even with its 1% MER, outperformed the low fee ETF portfolio by a full 1% even after fees. Interesting! I can spot the reasons why:

+ good bond allocation, not trying to time the bond market
+ no cash drag
+ better international diversification
+ regular rebalancing

And I think that's the value of professional management using mutual funds. To me this is a clear example of how a 1% MER is worth it, when the fund is well managed and is able to successfully stick to the basics. This person wasn't a novice investor, and I was helping them manage the portfolio as well. And yet both of us made mistakes that hurt performance... especially on cash drag and trying to time the bond market.

I used to point more people to ETF investing and couch potato approaches. These days I find that I'm often recommending good quality portfolio mutual funds, since the fees have come down so much.


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## dotnet_nerd (Jul 1, 2009)

That's really interesting James, thanks for those calcs.

I'm not sure that proves the case for paying a fairly high MER though. I wonder what the CAGR would be for the same portfolio setup with ultra low fee ETFs like VCN/VAG. (Although I don't think those go back to 2007).

More importantly...What I took away from your case study, was the value of sticking to a disciplined approach. That's a decent return for someone getting started at the _worst possible time._


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## GreatLaker (Mar 23, 2014)

dotnet_nerd said:


> That's really interesting James, thanks for those calcs.
> 
> I'm not sure that proves the case for paying a fairly high MER though. I wonder what the CAGR would be for the same portfolio setup with ultra low fee ETFs like VCN/VAG. (Although I don't think those go back to 2007).
> 
> More importantly...What I took away from your case study, was the value of sticking to a disciplined approach. That's a decent return for someone getting started at the _worst possible time._


Yes.

Here is a link to Norm Rothery's wonderful Stingy Investor Asset Mixer for a 60/40 ETF portfolio. 
http://www.ndir.com/cgi-bin/downsid...tSize=1000.00&Withdrawal=0.00&CADUSD=Canadian

The asset allocation is 40% all Canadian bonds, 20% TSX, 20% SP500, 15% EAFE and 5% Emerging. Alpha (~MER) is set as Global Alpha Assumption for ETFs (which is actually high compared to what many funds MER is today). Start date is 2008 / End date 2018 (James said start date for his comparison was late 2007, but the asset mixer only allows selecting full years). Changing the start date one year in either direction can make a big difference in the return.

Average Gain (geometric) is 5.5%. So ETFs would have had about the same return as the D-series balanced fund. 

But yeah, James has a good point that many, perhaps even most people will not effectively manage even a simple ETF portfolio.

A friend age early 70s complained to me a couple of times about their portfolio that includes high-fee and DSC funds at Investors, some mutual funds at another bank and lots of cash from matured GICs, and asked for recommendations. They don't need any of the money for living expenses, and it is intended for an inheritance and bequests. I provided some reference material on investing in general, and ETFs. My inclination is that an asset allocation ETF like VBAL/VCNS or ZBAL/ZCON would be most suitable, due to the simplicity. I'm not asking for input here, just using this as an example of how for many people a simple set and forget portfolio that takes away the temptation to tinker and screw it up is most likely the best choice. 

It will be very interesting going forward to compare the performance of asset allocation ETFs to existing low-fee balanced funds like Mawer Balanced and BMO Monthly Income D.


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## james4beach (Nov 15, 2012)

I should clarify the takeaway message, I did not mean to say that mutual funds with 1% MER would outperform low fee ETFs. Instead I was trying to emphasize the benefit of good portfolio management -- discipline and methodology.

I agree that theoretical portfolio constructions using ETFs, such as couch potato, show excellent results. Here I am looking at a real world (11 year) account holding ETFs _with that intention_. Though the performance was acceptable, I think the real world account lost performance due to "management mistakes" such as allowing cash drag and trying to time the bond market.

What complicates this, though, is that professional funds can make management mistakes too. In fact the owner of this ETF account had considered the CIBC Monthly Income fund at the time. That mutual fund did worse over the 11 years, so in this case the ETF portfolio (mistakes and all) outperformed a mutual fund.



dotnet_nerd said:


> More importantly...What I took away from your case study, was the value of sticking to a disciplined approach. That's a decent return for someone getting started at the _worst possible time._


Tough to conclude much from one case study. I'm just saying that portfolio management is important. Throwing some low fee index ETFs into an account is not enough to do well... one has to be careful about methodology, stay disciplined, and avoid human weaknesses like the temptation to time markets.


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## james4beach (Nov 15, 2012)

GreatLaker -- on your comment about "set it and forget it" portfolios. I'm increasingly thinking that DIY portfolios made of index ETFs, like my case study, are a bad fit for people who want "set it and forget it".

The owner of my case study account was this kind of investor. They hardly ever logged into the account and had no intention to rebalance. Cash drag was inevitable with this kind of scenario. DRIP was not a realistic option as this was non-registered. I think the ETF portfolio requires a bit more engagement than this, at least doing cash management & rebalancing.

That being said, their return was acceptable and certainly beat some mutual funds, so maybe I'm overdoing the point.


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## AltaRed (Jun 8, 2009)

GreatLaker said:


> Yes.
> 
> Here is a link to Norm Rothery's wonderful Stingy Investor Asset Mixer for a 60/40 ETF portfolio.
> http://www.ndir.com/cgi-bin/downsid...tSize=1000.00&Withdrawal=0.00&CADUSD=Canadian
> ...


Thank you for that analysis. I use the Asset Mixer as well for comparative purposes. It is important to avoid using anything that includes the sharp V financial crisis in data ranges. I use either 1/1/2008 or 1/1/2010 in analyses because 1/1/2009 is a killer in screwing up useful trends.

To me, the key takeaways are:
1) Most investors would be best to just keep their hands off their investments and stick with a balanced fund (MF or ETF)
2) If the investor wants to deviate from 60/40, they either have to add an additional weighting in equity or fixed income accordingly, or pick one of the non-60/40 AA ETFs.
3) Recognize there could be differences in performance over time just because specific geographic weighting allocations vary between many of the funds.


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## Foxx88 (Aug 1, 2019)

Is there a reason people have only mentioned MAW104 and not MAW 105? Mawer has two balanced funds, which are essentially the same, with MAW 105 having "tax effective" in its name.

Regarding the reality that _*"past performance is not indicative of future results,"*_ even those who work at Mawer are the first to say that. I know this because an investment counsellor at Mawer said exactly that to me before I decided to invest in their funds balanced funds.


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## OnlyMyOpinion (Sep 1, 2013)

Do a search for Maw105 and you will find several past threads that mention it.

Yes, past not indicative of future, I think we learned that before we could walk didn't we?


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## Foxx88 (Aug 1, 2019)

I did try using the search function to look for posts about Mawer, Maw104, and Maw105 but there weren't any results. I'm new to the site, so maybe there's something about the search function I'm not aware of.


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## hfp75 (Mar 15, 2018)

dont discount MAW130 - the Global Balanced Fund....

MAW130 seems to eek out a bit better performance vs MAW104 / MAW105


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## AltaRed (Jun 8, 2009)

It also has a considerably different asset allocation on a geographic basis, i.e. considerably less Cdn equity. What you are saying is Cdn equity has been a bit of a boat anchor over the recent past.

A convenient chart to compare performances https://www.mawer.com/funds/performance/


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## james4beach (Nov 15, 2012)

AltaRed said:


> It also has a considerably different asset allocation on a geographic basis, i.e. considerably less Cdn equity. What you are saying is Cdn equity has been a bit of a boat anchor over the recent past.


One should be cautious about chasing recent returns. This is the classic mistake by mutual fund investors... the funds themselves can do great, but people _love_ hopping between them and hurting their own performance.

Rotating out of MAW104 to MAW130 due to the desire for greater returns would amount to "sell low" for Canadian stocks. Beware the temptation.


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## AltaRed (Jun 8, 2009)

I think that is a given that folks should understand by now. The Global one does not yet have 10 year performance.


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## Foxx88 (Aug 1, 2019)

hfp75 said:


> dont discount MAW130 - the Global Balanced Fund....
> 
> MAW130 seems to eek out a bit better performance vs MAW104 / MAW105


I'm already invested so don't plan on jumping funds. I was just looking for the threads about Mawer that someone referred to but couldn't find them. So if anyone else knows where those threads are, I'd appreciate if you would post the links.


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## Eclectic12 (Oct 20, 2010)

Here is one ... https://www.canadianmoneyforum.com/showthread.php/138040-Mawer-Tax-Effective-Balanced-Fund-MAW105


Cheers


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## Foxx88 (Aug 1, 2019)

Thank you.


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## james4beach (Nov 15, 2012)

With all the talk of these economic and trade fears, I think it's easy to forget just how amazingly well stocks have done recently. Both US and Canadian stock indices are practically at their all time highs right now.

I was benchmarking some funds over the last 3.5 years. Here is how some some of the funds in this thread stack up, with annualized return after fees:

RBF1006: 6.4%
GGF31148: 6.4%
INI120: 6.6%
MAW104: 7.5%
PHN350: 7.5%

As far as I can tell the mid 6% are the category average, and Mawer and PH&N are running higher.

I realize that start dates are arbitrary and can make a difference, but all of these are looking very strong over the last few years. That's over 4% real return for each!

Keep in mind though, these are stock-heavy. Stocks are at all time highs, and bonds have been doing well too. Under these circumstances a 60/40 portfolio _should_ be performing at full steam... this is a best case scenario.


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## like_to_retire (Oct 9, 2016)

Both US and Canadian stock indices are practically at their all time highs right now.[/QUOTE said:


> Yeah, I don't know about US stocks, but the Canadian Index has been pretty much sideways for quite some time except for that nasty dip in January 2019.
> 
> Here's a simple 1 year chart of XIC. Certainly nothing to hang your hat on.
> 
> ...


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## james4beach (Nov 15, 2012)

Those are non dividend adjusted charts, and the Canadian index has large dividends compared to S&P 500 so you have to look at total return.

Here's total return of XIC over 4 years... Canadian stocks are quite high right now, just about at all time highs. We're now up 54% since the TSX low in 2016.










Here's a longer term view back to 2010. These are tremendous gains in the TSX. I think it's hard to dispute that this is a powerful rally, continuing to near all time highs currently:


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## like_to_retire (Oct 9, 2016)

james4beach said:


> Those are non dividend adjusted charts, and the Canadian index has large dividends compared to S&P 500 so you have to look at total return.
> 
> Here's total return of XIC over 4 years... Canadian stocks are quite high right now, just about at all time highs. We're now up 54% since the TSX low in 2016. Are my eyes deceiving me? This looks like a strong bull run in the TSX.


Actually, those charts are from the TMX site including dividends, but they did completely modify their web site about 2 weeks ago, so maybe the charts aren't working as advertised.

ltr


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## james4beach (Nov 15, 2012)

I edited after you posted I think, added a longer term chart. I agree that there's been a lot of volatility in the last year or so but in the big picture, I still see the TSX in what looks like a strong bull run. That's 7% CAGR going back a decade... great return from the index.


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## OnlyMyOpinion (Sep 1, 2013)

like_to_retire said:


> Actually, those charts are from the TMX site including dividends, but they did completely modify their web site about 2 weeks ago, so maybe the charts aren't working as advertised.
> ltr


Don't you love it when websites subscribe to, "it ain't broke, but we'll fix it anyway".

It looks to me like your chart was pulled from the 'Quote' tab for xic. You can click on the 'Charting' tab and then click on 'Click here to access legacy charting' to get the old format. Who knows how long that choice will exist though. As they say, "all good things come to an end".

The quote tab will not allow you to integrate dividends and splits (only show what date they occurred). The charting tab (new format) allows you to choose dividends and splits, but it doesn't actually work as far as I can tell. :rolleyes2: Maybe the adage is "it ain't broke, so we'll break it"?

Anyway, the 'legacy' charting does still work to provide a 'total return'. As with all of these total return charting apps, what they actually do is artificially reduce the starting share/unit value for the selected period so that total return over the period takes you to the current price. 
I prefer to add one or more comparison items to the chart and then it will then give you a % return over the period - either with or without reinvested dividends depending which you have selected. Choose another etf, mf or stock - don't choose an index as a second item because it will not give a proper total return.
The legacy charting does not allow a custom period, only the canned periods. Oh well, I guess we get what we (didn't) pay for.

Here is 2 years of XIC with dividends and splits compared to XEG (iShares capped energy) for grins & giggles:


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## like_to_retire (Oct 9, 2016)

OnlyMyOpinion said:


> Don't you love it when websites subscribe to, "it ain't broke, but we'll fix it anyway".
> 
> It looks to me like your chart was pulled from the 'Quote' tab for xic. You can click on the 'Charting' tab and then click on 'Click here to access legacy charting' to get the old format. Who knows how long that choice will exist though. As they say, "all good things come to an end".
> 
> ...


OMG OMO (I always wanted to say that), it appears that the new advanced charting for TMX simply doesn't work. The reason I didn't go to the 'Click here to access legacy charting' is because they have degraded that also by not allowing cursor pricing.

So I check XIC using the 'new advanced charting' and you can see the two charts below. One is with dividends and one is without. Unfortunately, they're exactly the same. Duh. Sigh. Give programmers an inch and they'll ruin a site in minutes. The new site is horrible. A bunch of programming bloatware.

XIC One year Unadjusted for Dividends.









XIC One year Adjusted for dividends









ltr


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## james4beach (Nov 15, 2012)

Adding iShares *XBAL* to this list

This became a diversified asset allocation ETF similar to VBAL starting in 2019. Performance of XBAL and VBAL are very similar and will probably continue to be similar. If I had to choose between these I would personally lean towards XBAL because some of its major holdings are flagship iShares funds (XIC and XBB) which have excellent history.


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## dubmac (Jan 9, 2011)

I always enjoy reading the Quarterly summaries from MAWER. 
The Q4 summary is here. 
These summaries provide a helpful analysis on past events, and in the last few paragraphs, a few ideas on what to expect, or what not to expect in the coming decade. The managers evaluate the performance of each of their funds - and in doing so, provide a glimpse on the cause and effect that drove performance in each of their US, Int., Can., FI, and other Mutual funds. one takeaway that I have and will somewhat temper my expectations for 202 can be found in the final few paragraphs.

We would caution that it is unlikely for your portfolio’s return in 2020 to match what it achieved in 2019. From a valuation perspective, there is a higher degree of risk in the portfolio today versus a year ago: in aggregate, the increase in our underlying companies’ free cash flow per share has not increased as much as the portfolio’s mark-to-market value over the past year. And we know that investor psychology can be fickle.


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## Eder (Feb 16, 2011)

I love those Mawer kids...I was a bit dismayed that they did try to sell the firm....the only value is the brains behind the funds.


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## AltaRed (Jun 8, 2009)

I hold MAW104 in two registered accounts. I am going with the trend as long as the gig lasts. I have happy with first quartile performance on that fund category on a consistent basis.


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## Gator13 (Jan 5, 2020)

MAW105 is the only mutual fund I own. I have held it for a good number of years now. I was not aware that they put themselves up for sale.


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## AltaRed (Jun 8, 2009)

Gator13 said:


> MAW105 is the only mutual fund I own. I have held it for a good number of years now. I was not aware that they put themselves up for sale.


I think that is a bit of an overstatement. Mawer did ask for a strategic review. Quoted from Dec 7, 2018 G&M article


> Mawer launched its strategic review after a number of long-standing independent firms sold themselves to large Canadian banks. In 2018 alone, Bank of Nova Scotia acquired MD Management for $2.6-billion and Jarislowsky Fraser Ltd. for $950-million, while Toronto-Dominion Bank acquired Greystone Managed Investments Inc. for $792-million.
> 
> Lately, the banks have been hungry for asset managers because they see wealth management as their major growth driver over the next decade. The lending and housing boom is cooling, and baby boomers are approaching and entering retirement, which raises questions about saving and investing.
> 
> ...


It was a test of worth. Nothing to fret much about really. Everyone has a price.


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## Gator13 (Jan 5, 2020)

Probably from the same article in December 2018.



> Calgary’s Mawer Investment Management Ltd., which oversees $50-billion of client money, has decided not to sell itself. Instead, it will forge ahead as an independent firm.
> 
> For more than 40 years, Mawer has operated as an independent that is free from bank ownership. In November, however, the company revealed that it had hired bankers to consider a sale amid a frothy market for asset managers.
> 
> ...


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## AltaRed (Jun 8, 2009)

I chose not to quote the full article for copyright reasons.


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## Gator13 (Jan 5, 2020)

I hope Mawer continues to stay independent and do as they have done in the past. I hold it in a taxable account and would prefer to sell when I no longer have employment income.


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## agent99 (Sep 11, 2013)

Has this been discussed here? - a balanced monthly income ETF from BMO. 
ZMI. https://www.morningstar.ca/ca/report...x?t=0P0000SDE6

Yield ~4,33%; MER 0.61%; Total Return since inception 5.5%.

About 17.5% Canada, 9.25% USA, 16% Int., 40% Fixed Income.
Uses other BMO funds, I believe. https://www.bmo.com/assets/pdfs/gam/qpd-etf/en/bmoZMI_qpd-Eng.pdf

Anybody own this or have thoughts about it? (Here are some: https://stockchase.com/company/view/4307/ZMI-T )

This would probably be best in a registered account? 

MAW104 has had better past performance, if regular income is not important? Allocations of both are somewhat similar. Maybe past performance not such a good indicator?


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## james4beach (Nov 15, 2012)

agent99 said:


> Has this been discussed here? - a balanced monthly income ETF from BMO.
> ZMI. https://www.morningstar.ca/ca/report...x?t=0P0000SDE6


There's a thorough discussion here: Why not ZMI instead of VBAL?
And this page in particular: https://www.canadianmoneyforum.com/showthread.php/139582-Why-not-ZMI-instead-of-VBAL/page4

I was interested in ZMI at first, but then others pointed out that it achieves high yields through some of the exotic derivative based funds. It's too weird for me.

Currently I think the best high yielding "balanced fund" is BMO Monthly Income D series, which is mentioned earlier in this thread. I think it yields a little over 3% yield so it's a bit of a yield boost versus most balanced funds.


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## agent99 (Sep 11, 2013)

james4beach said:


> I was interested in ZMI at first, but then others pointed out that it achieves high yields through some of the exotic derivative based funds. It's too weird for me.


According to the Stockchase comments, that was once the case, but things have changed.

By John Hood:


> This was a little bit controversial because it was including a lot of “return of capital” rather than “return on capital” because of some of the investments they had. They have changed this in the last few months so it is a more straightforward ETF. Nothing wrong with it. It has a whole bunch of different products in it and now it is fine.


Larry Berman, who likes to be an ETF guru seems to think ZMI is a good etf. Nevertheless, I don't like the idea that it is made up of all those subsidiary etfs. But then Maw104 is like that too? But maybe less complex? 

PS: Memory must be failing me - forgot we discussed ZMI in past!


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## agent99 (Sep 11, 2013)

> Currently I think the best high yielding "balanced fund" is BMO Monthly Income D series, which is mentioned earlier in this thread. I think it yields a little over 3% yield so it's a bit of a yield boost versus most balanced funds.


Checked that out on BMOIL. (BMO31148). It seems to hold actual stocks. 1.02% MER. 3.44% trailing 12mo yield. 
There is another Balanced ETF Portfolio BMO31703. 0.88% MER. 1.9% TTM yield.
and BMO Monthly High Income II D BMO31833, 5.37% TTM yield. 1.2% MER (Mostly Canadian)

Without digging further, I don't get good feeling about these or any mutual funds. Time to quit!

Just read this Vbal vs MAW104 - https://boomerandecho.com/vbal-vs-mawer-balanced-fund-for-one-stop-investing/


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## agent99 (Sep 11, 2013)

Has anyone seen a recent comparison of the performance of balanced ETFs and MFs? In particular, for the calendar year 2019.

I am sure many of us have calculated how our own portfolios did in 2019. Our overall portfolio is essentially a balanced fund. Aim was 60/40, but due to strong equity markets, now something like 65/35. So interested to see how things would be if we start to move toward ETFs. Our "fund" had Total Return of just under 15% for 2019.

One reason to consider move to balanced funds, is that it is harder and harder to find individual corporate bonds and GIC rates are atill very low. Alternative may be something like ZDV+GIC as I just did in my TFSA.


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## AltaRed (Jun 8, 2009)

MAW104 was 15.0% for 2019.
https://www.mawer.com/funds/performance/
https://www.morningstar.ca/ca/report/fund/performance.aspx?t=0P0000714D

VBAL was 14.9% Market (14.81% NAV)
https://www.morningstar.ca/ca/report/etf/performance.aspx?t=0P0001CLVR

The only two I look at (and consider and/or own).


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## james4beach (Nov 15, 2012)

BMO Monthly Income, Series D was 14.81% in 2019

That's one I recommended to a few friends. My own allocation gained 13.3%


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## agent99 (Sep 11, 2013)

Great, so buying a balanced fund may do no worse (or better) than my own DIY portfolio. At least based on past good year.


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## AltaRed (Jun 8, 2009)

agent99 said:


> Great, so buying a balanced fund may do no worse (or better) than my own DIY portfolio. At least based on past good year.


Morningstar posts annual performances for a wide range of such products. One can compare their own 'fund' to those balanced products for perhaps 10 years of data. The issue most times is investors have a different AA than most of the 'balanced' 60/40 products and thus nothing to compare with. The new AA ETFs will change that in time due to products with different AA ratios.


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## agent99 (Sep 11, 2013)

agent99 said:


> Great, so buying a balanced fund may do no worse (or better) than my own DIY portfolio. At least based on past good year.


Mind you, those balanced funds have low distributions ~2%) So in times when markets are down, cash flow is low. My own "fund" spins off 2 1/2 times as much. Mind you, I was only thinking of using a balanced ETF for our registered accounts where it would replace a mix of equities, bonds and gics. Cash flow not as important there.


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## like_to_retire (Oct 9, 2016)

agent99 said:


> Mind you, those balanced funds have low distributions ~2%) So in times when markets are down, cash flow is low. My own "fund" spins of 2 1/2 times as much. Mind you, I was only thinking of using a balanced ETF for our registered accounts where it would replace a mix of equities, bonds and gics. Cash flow not as important there.


Of course your own fund throws off many times as much as those balanced funds. For smart guys like you and others at CMF, funds are a compromise. All the smart people here can beat the system many times over.

ltr


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## james4beach (Nov 15, 2012)

An individual can easily beat the yield, yes, but I'm not sure it's so easy to beat the long term returns of these funds. Some of these have very long track records and excellent total returns.

I can tell you that my own investments have underperformed these "good" balanced funds over the long term, and that's mainly because I made the mistake of changing my allocations over time. Heavy in stocks sometimes, very light in stocks other times. Short at times. What a mess... I shouldn't have done that.

Sure, my current investments are probably better, but it took me 15 years to get to the point where I can put together and follow through on a well structured strategy. There's a lot that can be said for a consistent, professionally managed portfolio over the long term.

I still prefer the DIY approach, and learning along the way.


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## agent99 (Sep 11, 2013)

like_to_retire said:


> Of course your own fund throws off many times as much as those balanced funds. For smart guys like you and others at CMF, funds are a compromise. All the smart people here can beat the system many times over.
> 
> ltr


It's not smartness really. It is more the intent. But it would be interesting to look at the detail of a fund like VBAL and see why the yield is so low. MAW104 too, but it at least has a track record of maintaining a high Total Return. My current model of 60% ZDV plus 40% GIC for 3.78% yield instead of 2%. So do the non Canadian holdings drag down the yields on VBAL/MAW104?

Top 25 Holdings of ZDV (Look familiar  )
% of Net Asset Value

Sun Life Financial Inc. ......................................................... 3.3
Enbridge Inc. ................................................................... 3.3
National Bank of Canada ................................................... 3.3
Inter Pipeline Ltd...............................................................3.2
Power Corporation of Canada ..............................................3.1
Canadian Imperial Bank of Commerce ..................................3.0
Manulife Financial Corporation..............................................3.0
Canadian Natural Resources Limited ......................................2.9
BCE Inc.......................................................................... ....2.9
Magna International Inc. ...................................................... 2.9
Bank of Nova Scotia, The,..................................................... 2.8
Great-West Lifeco Inc. ......................................................... 2.8
Toronto-Dominion Bank, The, ................................................2.8
Pembina Pipeline Corporation ................................................ 2.7
TC Energy Corporation ......................................................... 2.7
Brookfield Property Partners L.P. ............................................2.6
Emera Incorporated............................................................. 2.5
Royal Bank of Canada ......................................................... .2.5
Bank of Montreal .............................................................. ...2.4
TELUS Corporation.............................................................. 2.3
Keyera Corp. ................................................................... ..2.2
Algonquin Power & Utilities Corp. .......................................... 2.2
Canadian Tire Corporation, Limited, Class A..............................2.1
Shaw Communications Inc., Class B ....................................... 2.1
Thomson Reuters Corporation................................................. 2.1
Top Holdings as a Percentage of Total Net Asset Value.............. 67.7


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## AltaRed (Jun 8, 2009)

VBAL has 18% Cdn equities. As a global balanced fund, it is not meant to be compared to 60% Cdn equities in a 60/40 portfolio. The point is?


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## cainvest (May 1, 2013)

james4beach said:


> Mawer Balanced Fund (MAW104)
> MER 0.92%. Allocation is 17% Canada, 41% foreign. The 10 year return is 8.06% cagr, far above average for global balanced funds. Available through TDDI.
> 
> Tangerine Balanced Portfolio (INI120)
> ...


Anyone compared these funds to see how they are holding up to recent events?


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## peterk (May 16, 2010)

^ Curious about this too. Most of my wife's NW is in Tangerine Balanced. Been wondering if it's worthwhile to start coaxing her towards a broker and a BAL etf or couch potato of some sorts, or if I should just let it be.


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## cainvest (May 1, 2013)

Here's a 6 month chart


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## AltaRed (Jun 8, 2009)

Cash flow yield percentage as noted by Agent99 above is a red herring in a balanced portfolio AND a cash reserve/buffer. For a retiree, a 1 year HISA cash reserve would take care of the hiccup shown in Cavinvest's 6 month chart above. Simply draw from the HISA rather than the portfolio for March, April, May of this year, and potentially another few months yet to come. Want more conservatism? Then 2 years of HISA or cash equivalents to take one will into 2021 and replenish once equity markets recover.

I know many CMFers roll their own for a number of reasons, e.g. boost portfolio cash yield, but that is really personality and desire of control, rather than longer term outcomes. It is almost certainly not going to make any difference in the long run. I roll my own as well for the most part (TFSA excepted which is MAW104) with a 3% portfolio yield rather than a 2% yield from a balanced fund, but I know that is nothing more than my own personality and behavioural traits, not because it is likely ultimately better from a strictly numbers assessment. We will all do as we want to do, but we should at least recognize, and perhaps admit, our own biases.


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## james4beach (Nov 15, 2012)

james4beach said:


> PH&N Balanced D Series (PHN350 or RBF1350) and I think those two codes refer to the same fund. MER is only 0.88%.


This was a recommendation a couple years ago from fatcat: *RBF1350* the PH&N Balanced Fund

I was reviewing a few balanced funds tonight and this one had a particularly good 2019 and 2020






PH&N Balanced Fund D, Fund, performance | Morningstar


Morningstar Financial Research conducts Analysis on Markets, Mutual Fund, Stocks and ETFs through Investment Data and News.




www.morningstar.ca





The 15 year return is 6.1% and since inception (29 years ago!) the return was 7.4% CAGR. Very solid international diversification and continues to perform very strongly in recent years.


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## capricorn (Dec 3, 2013)

james4beach said:


> This was a recommendation a couple years ago from fatcat: *RBF1350* the PH&N Balanced Fund
> 
> I was reviewing a few balanced funds tonight and this one had a particularly good 2019 and 2020
> 
> ...


Thank you. I was looking for something besides maw104 and VBAL. This is timely update.


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## dubmac (Jan 9, 2011)

Fund comparison tool







www.vanguardcanada.ca





RBF1350 did really well over the past yr. They have the highest capital among the 4, and highest pf turnover rate (more active trading?? don;t know)
I am drawn to funds to produce solid returns over the long term (since inception, last column in the graph). 
Mawer balanced perform well over time, which is why I keep putting money into MAW104 in registered and MAW105 in taxable accounts. Mawer has the higher return on equity, and lowest pf turnover (more buy and hold??). It does, however, have significant amount of assets in Canada - to offset this weighting, I also have Mawer Global Balanced - which increases global portion of assets.
BMO monthly income is an interesting one. Has a nice dividend (3.4%), and a reasonable return. Good for retirees?
Interesting comparison.


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## cainvest (May 1, 2013)

james4beach said:


> This was a recommendation a couple years ago from fatcat: *RBF1350* the PH&N Balanced Fund
> 
> I was reviewing a few balanced funds tonight and this one had a particularly good 2019 and 2020
> 
> ...


Mawer 104 did a little better, 15 yr 7.74% and 8.45% since 1988.
In recent years the PH&N Balanced Fund does seem to be doing well.


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## james4beach (Nov 15, 2012)

cainvest said:


> Mawer 104 did a little better, 15 yr 7.74% and 8.45% since 1988.
> In recent years the PH&N Balanced Fund does seem to be doing well.


MAW104 certainly has great performance too.

The RBF1350 is a series 'D' which would explain the low MER. Does anyone know if it's available through the major brokerages?


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## GreatLaker (Mar 23, 2014)

james4beach said:


> The RBF1350 is a series 'D' which would explain the low MER. Does anyone know if it's available through the major brokerages?


RBF1350 is available at TDDI. Looks like it has a $1000 minimum.

Interestingly the A series version RBF7350 is not available at TDDI. The management fee for the A series is exactly 1% higher than the D series (1.75% vs 0.75%).

At TD if there is a D series and A series of the same fund they will usually not sell the A series through TDDI.


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## Money172375 (Jun 29, 2018)

GreatLaker said:


> RBF1350 is available at TDDI. Looks like it has a $1000 minimum.
> 
> Interestingly the A series version RBF7350 is not available at TDDI. The management fee for the A series is exactly 1% higher than the D series (1.75% vs 0.75%).
> 
> At TD if there is a D series and A series of the same fund they will usually not sell the A series through TDDI.


A series is for advisors to sell. D series is for discount brokers.


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## GreatLaker (Mar 23, 2014)

Money172375 said:


> A series is for advisors to sell. D series is for discount brokers.


Until recently discount brokers would allow clients to buy A series funds and happily keep the trailing commission. 








Regulators crack down on funds sold by discount brokers


Canadian securities commissions unveil new rules designed to settle decades-long industry controversy




www.theglobeandmail.com





Edit: I did not realize the G&M article was behind their paywall. Here is the main point from the article that was published on Sept 17, 2020:


> On Thursday, investment industry regulators finalized rules that will ban fund companies from paying trailing commissions to discount brokerages, starting June 1, 2022. At the same time, discount brokerages are prohibited from accepting or soliciting similar commissions from fund companies.


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## Money172375 (Jun 29, 2018)

GreatLaker said:


> Until recently discount brokers would allow clients to buy A series funds and happily keep the railing commission.
> 
> 
> 
> ...


I can’t see the article, but I suspect discount brokers were selling I series. Same premise though.


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## GreatLaker (Mar 23, 2014)

Money172375 said:


> I can’t see the article, but I suspect discount brokers were selling I series. Same premise though.


Sorry James I did nor realize the article was behind the G&M's paywall. I edited my post to add the main point of the article.

One thing I dislike about mutual funds is the alphabet soup of various fees and compensation schemes, including A, B, C, D, e, F, I, T
Understanding Different Mutual Fund Classes (boomerandecho.com)


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## james4beach (Nov 15, 2012)

GreatLaker said:


> One thing I dislike about mutual funds is the alphabet soup of various fees and compensation schemes, including A, B, C, D, e, F, I, T
> Understanding Different Mutual Fund Classes (boomerandecho.com)


I also don't like that. The fee structures in general are very complex for mutual funds. It's a huge benefit of ETFs, in my opinion.

For example I've been interested in several Beutel Goodman mutual funds over the years. I tried to understand what kinds of front end fees I'm looking at, if I bought them at my discount brokerage. Even the brokerage didn't seem to know. So am I just supposed to buy it and find out? Ridiculous.

There are many MFs that I'd recommend to friends & family if not for these fee structures / compensation scheme complexity.


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## james4beach (Nov 15, 2012)

I took a look again at the Mawer and PH&N funds and the portfolios still look good to me.

These continue to be my favourite balanced funds. Family members own some of these. Curious if anyone else has any opinions or updated thoughts?

Mawer Balanced Fund (MAW104)
PH&N Balanced Fund, Series D (RBF1350)
BMO Monthly Income, Series D (GGF31148) *
Vanguard VBAL
iShares XBAL **

* I'm concerned that the BMO fund has entirely Canadian equity, if the Morningstar page is accurate.
** XBAL is the closest to my own DIY portfolio and includes many of my holdings, so I keep an eye on this.


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## Beaver101 (Nov 14, 2011)

^ FYI, the "_BMO Monthly Income, Series D (GGF31148)_" has now converted to "_BMO MTH INC CLSS F BMO95148_". It's one of my legacy (ie set and forget) mutual fund in my RRSP as with another one in RBC (no longer for sale under registereds). I'm not sure if the RBC one will be converted since it's still under listed as a D series. Both are still in positive territory - as owned both for more than 10 years. Unlike the bond fund which is being slaughtered at the moment. Oh well, can't win them all.


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## MrMatt (Dec 21, 2011)

Model Portfolios | Canadian Couch Potato






canadiancouchpotato.com





I think with commissions so low, ETFs make a lot of sense
VBAL, XBAL or ZBAL provide the classic split at very low cost.


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## james4beach (Nov 15, 2012)

MrMatt said:


> I think with commissions so low, ETFs make a lot of sense
> VBAL, XBAL or ZBAL provide the classic split at very low cost.


But not everyone likes discount brokerages though. My parents tried it but it wasn't a good fit for them. They weren't able to log in and place their own trades and despite my help, the whole thing was awkward for them. Mutual funds are also better if you're making frequent small trades. I'd say there are still several reasons to go the mutual fund route, for some people.


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## Beaver101 (Nov 14, 2011)

^ Keep in mind that buys and sells of mutual funds at BMOIL and CIBCIE now requires a commission. None for sells at RBC DI. And I believe none whatsoever over at TDDI still. 

And then there're no commissions per se if you buy and redeem mfs on the bank's retail level (non brokerage) but then they got the high(er) MERs there.


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## off.by.10 (Mar 16, 2014)

Brokerages are moving to free trading on ETFs so the small trade argument does not really hold anymore. It seems like the only reason left to use mutual funds is if you need to talk with a salesman. Some people do.


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## Beaver101 (Nov 14, 2011)

off.by.10 said:


> Brokerages are moving to free trading on ETFs so the small trade argument does not really hold anymore. It seems like the only reason left to use mutual funds is if you need to talk with a salesman. Some people do.


 ... are the reps. at the brokerages trained to make recommendations on mutual funds now? I'm not aware of that. I think Money would know - on the bank side though. 

As for free trading on ETFs which major bank other than National and BMO part list provide "free" , let alone "small - like how small?" ETFs trading?


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## MrMatt (Dec 21, 2011)

james4beach said:


> But not everyone likes discount brokerages though. My parents tried it but it wasn't a good fit for them. They weren't able to log in and place their own trades and despite my help, the whole thing was awkward for them. Mutual funds are also better if you're making frequent small trades. I'd say there are still several reasons to go the mutual fund route, for some people.





off.by.10 said:


> Brokerages are moving to free trading on ETFs so the small trade argument does not really hold anymore. It seems like the only reason left to use mutual funds is if you need to talk with a salesman. Some people do.


If you're asking for advice here, you'll get the do it yourself.
If you're using an advisor, ask them, that's what you're paying for.


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## off.by.10 (Mar 16, 2014)

Beaver101 said:


> As for free trading on ETFs which major bank other than National and BMO part list provide "free" , let alone "small - like how small?" ETFs trading?


Desjardins does as well. I doubt the others will hold out very long.

I don't think there's any limit to how small. I bought 3 shares with the grant money in my RESP. No commission. I'd have to reread the fine print but I think the only limitation is a minimal holding period, similar to mutual funds if I remember correctly. Meaning basically you can't day trade with this.


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## Beaver101 (Nov 14, 2011)

off.by.10 said:


> Desjardins does as well. I doubt the others will hold out very long.


 .... interesting availability of commissions-free ETFs (does this include US ones?) through Desjardins but keep in mind, investors are national-wide. And if I recall correctly, Desjardins requires membership as it's a caisse?



> I don't think there's any limit to how small. I bought 3 shares with the grant money in my RESP. No commission. I'd have to reread the fine print but I think the only limitation is a minimal holding period, similar to mutual funds if I remember correctly. Meaning basically you can't day trade with this.


 ... and if I recall correctly, National requires a minimum of 100 units. And I think it's the same as BMOIL - but then nothing interesting on BMOIL's "84 wowie" ETFs list even though I'm with BMOIL since day 1 of my investment days.


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## off.by.10 (Mar 16, 2014)

Beaver101 said:


> .... interesting availability of commissions-free ETFs (does this include US ones?) through Desjardins but keep in mind, investors are national-wide. And if I recall correctly, Desjardins requires membership as it's a caisse?


I don't think a Quebec address is required but I could be mistaken. And I'm not sure the trading branch requires a membership either. Even if they do, it's just a $5 deposit.

I don't trade US equities there but their website claims no commissions on both ETFs and equities and the only note is about having to pay SEC fees for the US market, a tiny amount as far as I know. Speaking of website, it's so much better than BMO it's not even funny. Has been for decades, both on the banking and investment sides.



Beaver101 said:


> ... and if I recall correctly, National requires a minimum of 100 units. And I think it's the same as BMOIL - but then nothing interesting on BMOIL's "84 wowie" ETFs list even though I'm with BMOIL since day 1 of my investment days.


No minimum, I bought my 3 shares at BMOIL.


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## james4beach (Nov 15, 2012)

For anyone using Scotia iTrade, it turns out that the following funds are commission-free (no trade fee) as per attached list

XBAL
VCNS (conservative allocation)
XCNS (conservative allocation)
XGRO (aggressive growth allocation)


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## afulldeck (Mar 28, 2012)

james4beach said:


> For anyone using Scotia iTrade, it turns out that the following funds are commission-free (no trade fee) as per attached list
> 
> XBAL
> VCNS (conservative allocation)
> ...


I was surprised that XEQT was not on that list.....


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## AltaRed (Jun 8, 2009)

afulldeck said:


> I was surprised that XEQT was not on that list.....


I find some of iTrade's selections odd. Many of them are legacy commission free offerings from years ago so I guess they just kept them, but it would seem more logical to include ALL of Blackrock's and Vanguard's AA ETFs like BMO Investorline does. I have not written to iTrade to ask why but they are missing out on opportunities not to capture the full suite of them (even if they don't want to include their competitor Zseries ones - which I understand).

All said though, most folk would want XBAL/XGRO or VBAL/VGRO and as long as one of each of the *BAL and *GRO ones are offered, that is good enough.


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## james4beach (Nov 15, 2012)

AltaRed said:


> I find some of iTrade's selections odd.


Yes I agree it's a weird selection, but at least they have XBAL. They also have HXS which is a nice option for the unhedged S&P 500 index.


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## afulldeck (Mar 28, 2012)

james4beach said:


> Yes I agree it's a weird selection, but at least they have XBAL. They also have HXS which is a nice option for the unhedged S&P 500 index.


Well they have XIC but not XAW. So I win on one buy and lose 9 bucket on the other...In my non-registered accounts


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## james4beach (Nov 15, 2012)

I wanted to share a note, since I've been going through iShares financial reporting and took a close look at XBAL.

This 60/40 fund is kind of interesting in that they've added some risk to the bond side by going pretty heavy into corporates. There are pros and cons to this. The main con is that by taking on more credit risk, XBAL is more vulnerable to losses in a catastrophe scenario (like 2008 and 2020) where corporate bonds crash. So this makes XBAL a bit *riskier*.

The pro is that XBAL enjoys some extra "credit risk premium" which should juice up the returns a bit in the long term. Another way to look at this is that XBAL is effectively slightly more than 60% equities. You might say it's equivalent to a 65/35 or even 70/30 allocation. Actually during the 1970s when high inflation was a big problem, riskier corporate bonds turned out to be a better investment because the "credit risk" premium amped up the returns.

Not a big deal but wanted to share.


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## cainvest (May 1, 2013)

james4beach said:


> This 60/40 fund is kind of interesting in that they've added some risk to the bond side by going pretty heavy into corporates.


They are 4% heavier into BBB rated bonds vs VBAL ... really nothing to be concerned about.


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## james4beach (Nov 15, 2012)

cainvest said:


> They are 4% heavier into BBB rated bonds vs VBAL ... really nothing to be concerned about.


Oh is VBAL that similar? I didn't realize that.


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## MrMatt (Dec 21, 2011)

cainvest said:


> They are 4% heavier into BBB rated bonds vs VBAL ... really nothing to be concerned about.


I agree, this is really getting into the weeds, which is decidedly against the intention of the "couch potato/balanced" approach.

I also think that if there is extra risk, assuming efficient markets, the pricing should reflect that, so that you can "safely" ignore these differences as the risk will be properly compensated for by the risk premium. Secondly you still have a LOT of fixed income.


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## AltaRed (Jun 8, 2009)

The difference between VBAL and XBAL is mostly noise (Cdn equity component weighting difference notwithstanding) plotted on a chart. Our suite of 'family' accounts have defaulted to the Vanguard series of AA ETFs in ideological support of Vanguard Canada over the big bad monster of Blackrock, but the truth of the matter is the Blackrock versions could be marginally better over the very long term (lower MER and lower Canadian equity component).


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## TomB16 (Jun 8, 2014)

I apologize for muddying up this thread but as a vocal non-balancer with only minor affinity to broad indices, I will say I consider Mawer a competent company. An average person who doesn't know anything about anything can invest in MAW104 and out perform more than half of DIY investors. I respect the MAW104 fund, as everyone seems to.

If the world falls off a cliff in Q4/Q1, as I suspect, I will look very seriously at picking up some MAW120.


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