# Re-thinking TFSA accounts



## jman123 (Jan 28, 2015)

Greetings,

Just retired about 4 months ago, age 66, and in the process of opening up my RRIF and LIF accounts. 

Now, I have been thinking of my TFSA accounts. 

Currently, rounded to the closest $1K I have :

Tangerine Balanced Portfolio = $42K
Tangerine GIC = $14K (6 month 2.0% due in Jan 2020)
RBC Direct Investing account = $10K (BNS,CM,MIC,GWO each $1K, HMMJ = $6K) 

TFSA contribution room = $5,350

My wife has:

Tangerine Balanced Portfolio = $44K
Tangerine GIC = $16K (6 month 2.0%, due in Jan 2020)
Tangerine TFSA saving account = $7K (interest rate 1.15%) 

TFSA contribution room = $4,940 

I will have about $12K from a non-registered stock I just sold. 

In the past, when I had regular work income, I followed the advice of the Couch Potato Portfolio and contributed every week to the Tangerine Balanced Fund and/or in a Tangerine TFSA saving account (usually a total of $100-$120 per week for each of us). It was a convenient way of buying an ETF on a regular basis without transaction fees and also at one point Tangerine had a competitive savings interest rate.

Recently, I moved some of the monies from their saving account to GICs due to their paltry interest rates.

My investment in the RBC Direct investing account was the result of some MoneySense article on dividend paying companies and the HMMJ stock , well that was my brother-in-laws suggestion (lol).

I have the $12k and I could just max out our TFSAs contribution for 2019 by buying more units of the Tangerine Balanced Portfolio. Then , in 2020, I could re-start my weekly contributions using funds from some saving account as I did last year (and a bit this year). 

For my RRIFs and LIFs I am striving for a 60/40 split so I think maybe I should go that route for my TFSA as well.

Been wondering if maybe there is a better route.

Your opinions would be appreciated.

Thank you


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## gardner (Feb 13, 2014)

I'm not sure I fully understand the Q.

Should you continue to contribute to your TFSA in retirement? In my opinion, yes, you should load it up as much as possible, as long as you have sources of income to keep up. Ultimately the TFSA would be the last thing to go, much later in retirement.

Should the mix of assets change? Maybe. Generally I would look to weighting towards fixed income more after retirement. It might make sense to put the 10K into TFSAs and buy 3% GICs versus a balanced fund, so as to shift the weighting towards fixed income.

Also, since non-registered holdings benefit from lighter capital gains and dividend tax burden, it makes sense for an overall equity/fixed-income split to be weighted so that more FI is registered and more equity is non-registered.


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## AltaRed (Jun 8, 2009)

The other argument is the higher return (and growth) assets should be in the TFSA especially given its non-tax status which can have a higher long term impact than tax-advantaged income (cap gains and eligible dividends) being in non-reg accounts. Not a clear cut answer in my opinion, and may be very situational depending on retiree's age, robustness of investment portfolio, etc. Maybe be 'indifferent' to TFSA vs non-registered in terms of what is put where.

Added: Not that it may matter for the OP, but I expect that I will never have to tap into my TFSA. Hence I keep it fully funded and have it invested 60/40 in MAW104 as s legacy for my beneficiaries....whether I live another 2 months or 25 years.


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## jman123 (Jan 28, 2015)

AltaRed said:


> The other argument is the higher return (and growth) assets should be in the TFSA especially given its non-tax status which can have a higher long term impact than tax-advantaged income (cap gains and eligible dividends) being in non-reg accounts. Not a clear cut answer in my opinion, and may be very situational depending on retiree's age, robustness of investment portfolio, etc. Maybe be 'indifferent' to TFSA vs non-registered in terms of what is put where.
> 
> Added: Not that it may matter for the OP, but I expect that I will never have to tap into my TFSA. Hence I keep it fully funded and have it invested 60/40 in MAW104 as s legacy for my beneficiaries....whether I live another 2 months or 25 years.


I have been thinking lately whether I should move from the Tangerine Balanced Fund to MAW104 or VBAL to get this 60/40 split but I like the convenience of setting up a weekly contribution to the Tangerine product. Any comment on the choices available? 

I like also to have some monies in cash or GICs in my TFSA just in case of unexpected expenses or possibly to buy a car sometime over the next 5-7 years. 

So, maybe 60% of total in a pure equity ETF (such as Tangerine Equity Growth Fund) and 40% split between cash and GICs in Tangerine. 

Anyways with only $70K total in my TFSA (and another $70K in my wife's TFSA) maybe I am just over-thinking this. I do think I will sell all in my RBC Direct Investing account and either move the funds to Tangerine or buy MAW104 or VBAL.


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## hfp75 (Mar 15, 2018)

jman123 said:


> I do think I will sell all in my RBC Direct Investing account and either move the funds to Tangerine or buy MAW104 or VBAL.



FYI - RBC DI will not sell you Mawer funds.......


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## jman123 (Jan 28, 2015)

hfp75 said:


> FYI - RBC DI will not sell you Mawer funds.......


Oh, you're right. It looks like the only option for MAW104 in RBC DI is to sell. 

What online brokerage does allow you to buy Mawer funds?


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## cainvest (May 1, 2013)

jman123 said:


> What online brokerage does allow you to buy Mawer funds?


Scotia iTrade


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## AltaRed (Jun 8, 2009)

cainvest said:


> Scotia iTrade


And some others...as discussed in another thread somewhere. I think BMOIL, TDDI, CIBCIE all do but I stand corrected. My holding is in Scotia iTrade. RBCDI may be trying to protect their own PH&N line of funds


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## jman123 (Jan 28, 2015)

AltaRed said:


> And some others...as discussed in another thread somewhere. I think BMOIL, TDDI, CIBCIE all do but I stand corrected. My holding is in Scotia iTrade. RBCDI may be trying to protect their own PH&N line of funds


What is PH&N line of funds?


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## AltaRed (Jun 8, 2009)

Part of RBC family of mutual funds. RBC bought PH&N many years ago. PH&N had a good rep as an independent especially in bond funds. Some CMF members still hold them I imagine but they are not talked about much. Mawer seems to have risen to the top in many cases especially for their actively managed balanced funds.

If you get interested in PH&N, br sure to do Morningstar comparisons to check performance. Often when the big 5 absorb something, it begins to taint the product.


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## james4beach (Nov 15, 2012)

AltaRed said:


> Part of RBC family of mutual funds. RBC bought PH&N many years ago. PH&N had a good rep as an independent especially in bond funds. Some CMF members still hold them I imagine but they are not talked about much. Mawer seems to have risen to the top in many cases especially for their actively managed balanced funds.


How about: PH&N Balanced D Series (PHN350 or RBF1350) for self-directed (RBC DI) accounts, only 0.88% MER which is slightly lower than Mawer's. It seems to be steadily beating the category average and seems like a very reasonable alternative to MAW104.

This PH&N fund seems to be steadily outperforming Tangerine, even after RBC bought it.


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## kcowan (Jul 1, 2010)

Even their bond fund RBF5380 has achieved 4.35% APR with the same 0.88 MER.


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## OnlyMyOpinion (Sep 1, 2013)

james4beach said:


> How about: PH&N Balanced D Series (PHN350 or RBF1350) for self-directed (RBC DI) accounts, only 0.88% MER which is slightly lower than Mawer's. It seems to be steadily beating the category average and seems like a very reasonable alternative to MAW104...


Not really:








10yr all in RBF1350 is 108% while MAW104 is 175%


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## fireseeker (Jul 24, 2017)

OnlyMyOpinion said:


> Not really:
> View attachment 19524
> 
> 
> 10yr all in RBF1350 is 108% while MAW104 is 175%



*Past performance is not indicative of future results.
*
Also the manager of RBF1350, one Sarah Riopelle, took over in 2015.
Not sure history has much to teach here, other than these are both reasonable choices, reasonably run and reasonably priced.


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## AltaRed (Jun 8, 2009)

RBF1350 seems to be a suitable alternative for those committed to RBCDI, but in principle, I loathe any company that restricts my options.


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## james4beach (Nov 15, 2012)

AltaRed said:


> RBF1350 seems to be a suitable alternative for those committed to RBCDI, but in principle, I loathe any company that restricts my options.


Other brokerages restrict options too. For example TD doesn't allow the purchase of PSA, a high interest savings ETF which trades as a stock. I'm kind of shocked they can get away with restricting access to this, obviously it directly competes with TDB8150 (from which they collect enormous 0.25% fees).


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## AltaRed (Jun 8, 2009)

I recognize the brokerages typically restrict ISA type options to their in-house options. Generally unacceptable, especially when a 25bp trailer is involved, but less egregious than restricting offerings with the potential for "real" returns. 

PSA performance is right in the range of brokerage ISAs sold as mutual funds. 1/3/5 year PSA returns per Morningstar are 2.13/1.47/1.34% At the very least, discount brokerages should be offering their in-house ISAs with no trailer (F class).


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## OnlyMyOpinion (Sep 1, 2013)

fireseeker said:


> *Past performance is not indicative of future results.*
> Also the manager of RBF1350, one Sarah Riopelle, took over in 2015.
> Not sure history has much to teach here, other than these are both reasonable choices, reasonably run and reasonably priced.


I was just responding to, _"MER which is slightly lower than Mawer's... steadily beating the category average... seems like a very reasonable alternative to MAW104"_, and pointing out that one had noticeably outperformed the other on a 10yr basis. 
Actually it has outperformed on a 1yr, 2yr, 3yr, 5yr and 20yr basis as well but as you point out that's history. You seem to be suggesting RBF can be expected to perform differently under recent new management so please have at it.

Disclosure: My opinion is biased - I own MAW and stopped dealing with RBC many years ago, although I do own RY stock. Go figure, it has handily exceeded the performance of both funds (historically speaking).


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## james4beach (Nov 15, 2012)

My family members hold significant amounts in Mawer as well, and I agree they have great funds (and an excellent balanced fund).

But there is the real possibility that Mawer's outperformance for the last few years was due to some tactical choice they made, along with pure luck (e.g. going light on commodities) that they might not be able to repeat long term. It's the same story with any portfolio management: it's really hard to differentiate between luck and skill.

I think it's fine to choose any balanced fund which (a) has good diversification and sector exposures, (b) shows enough history to prove management is ok and "reasonably run", (c) has low MER, (d) is at least beating category average which shows it doesn't have a chronic problem or fatal flaw

And I think many are fine choices based on that: MAW104, RBF1350, or GGF31148 which I've steered friends towards


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## cainvest (May 1, 2013)

james4beach said:


> But there is the real possibility that Mawer's outperformance for the last few years was due to some tactical choice they made, along with pure luck (e.g. going light on commodities) that they might not be able to repeat long term. It's the same story with any portfolio management: it's really hard to differentiate between luck and skill.


While you right that there is no way of knowing the future MAW104 has returned 8.5 since 1988. Now that's a pretty long run of luck in many market conditions so I suspect they have a good strategy.


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## james4beach (Nov 15, 2012)

cainvest said:


> While you right that there is no way of knowing the future MAW104 has returned 8.5 since 1988. Now that's a pretty long run of luck in many market conditions so I suspect they have a good strategy.


It's a great track record, and I think it's a fine fund. But here's another way to look at this:

Imagine that 1,000 balanced mutual funds were created in 1980 and each had slightly different management which made some random decisions, nothing strategic but just slightly random and different for each one (just flipping coins and such). Over the years, some funds would do better and some would do worse. After a decade, perhaps only 200 of the original funds are consistently outperforming. After two decades, only 50 are outperforming. By today, there would be a handful left out of the 1,000 which showed great performance since 1988.

Even with these _random_ variations in management, inevitably, one or two would look like the fantastic one remaining today. Tons of mutual funds have existed since the 80s and just due to pure dumb luck, one of them today would stand out as the best. Let's call it the Flower Power Fund in this hypothetical.

This Flower Power Fund would show an amazing track record back to inception. People would make the same comment you did, that it must take a very long sequence of luck to have such great results. But there will *always* be a Flower Power Fund.

(In fact, big mutual fund companies exploit this statistical trick quite routinely. They create huge crops of mutual funds, run them for a while, and shut down the losers. Over time they end up with a couple star funds within their offering which really stand out as having incredible track records... it's just a statistical outcome, it doesn't mean the fund is any good).

One should not rule out the possibility that Mawer Balanced is like the hypothetical Flower Power Fund, the inevitable outcome of random variations within a huge group of alternatives. There might not be any amazing skill at work, or any amazing insight. Nobody really invested in MAW104 before about 2007, which makes me wonder: If the fund was always so great, how come nobody noticed it? (had small assets under management until recent years)

I don't mean to knock Mawer, and my family members do invest heavily in their funds, but it really could just be random. And if that's true, it might have the same chances of doing well going forward as any other decently run balanced fund.


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## fireseeker (Jul 24, 2017)

^ +1. IMHO, this is the appropriate way of thinking about historical returns. Distinguishing between true skill and random luck is impossible.


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## cainvest (May 1, 2013)

james4beach said:


> One should not rule out the possibility that Mawer Balanced is like the hypothetical Flower Power Fund, the inevitable outcome of random variations within a huge group of alternatives. There might not be any amazing skill at work, or any amazing insight. Nobody really invested in MAW104 before about 2007, which makes me wonder: If the fund was always so great, how come nobody noticed it? (had small assets under management until recent years)


True enough, statistically there is always a current Flower Power fund. But given ones options in selecting such a fund would you not go for the one that has a better/longer track record of being "apparently" lucky?

Not sure why pre-2007 had lower invested amounts, could be lots of reasons ... marketing exposure, limited access via online brokerages, "all in one" funds not in favor, people chasing higher returns trying to beat the market ... anyone's guess really.


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## AltaRed (Jun 8, 2009)

+1 I look at 1, 3, 5, 10, and 20 year performance comparisons with 'like' products and make a judgement. I don't know why I would pick a 2nd tier performer over a top decile performer based on those performance data points alone recognizing there are no guarantees on anything at all. Seems like this is an argument just to have an argument.


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## james4beach (Nov 15, 2012)

You should pick the best performing one, within some noise margin. Yes of course you shouldn't pick ones that have a history of underperformance. Again, nothing wrong with picking MAW104.

AltaRed if you think this is just an argument for the sake of argument, then I think you're not understanding a really important point here (or perhaps it's extremely obvious to you, but I know for certain it's not obvious to others). The point is that, among sane and competently managed balanced funds, there isn't much of a reason to think Mawer's will keep performing the best going forward.

An investor could buy MAW104 today and see nothing but average performance going forward, a seeming end to "the magic" the moment they buy. They need to understand this would be perfectly normal due to what I described above. An investor who doesn't understand this statistical phenomenon might _leap out of_ MAW104 and into the next Flower Power Fund, constantly chasing past returns. *They will probably do it at a point MAW104 is depressed versus average*. Hopping from one fund to the next, and therefore hurting their returns over time.

Many people do that.


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## like_to_retire (Oct 9, 2016)

james4beach said:


> AltaRed if you think this is just an argument for the sake of argument, then I think you're not understanding a really important point here (or perhaps it's extremely obvious to you, but I know for certain it's not obvious to others). The point is that, among sane and competently managed balanced funds, there isn't much of a reason to think Mawer's will keep performing the best going forward.


I don't know, I wonder at what point do you have to concede that MAW104 is a winner? 

It's been doing it for 31 years. Is that not enough?

If I do a 20 year chart against the index or just about anything else it blows them away.

James, when do you say, "OK, this is probably a good balanced fund"? 50 years, 100 years?

After 100 years will you still say,_ "there isn't much of a reason to think Mawer's will keep performing the best going forward".
_
ltr


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## AltaRed (Jun 8, 2009)

James is correct in saying there are no forward guarantees, but forgets that if someone wants to invest in an actively managed 'global neutral' balanced fund today, some criteria needs to be used beyond throwing a dart. Subject to no imminent news about the fund management company and its fund managers, might as well default to that with the track record. It is no different than picking a stock. An 'A list' stock could f*ck up tomorrow.


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## james4beach (Nov 15, 2012)

like_to_retire said:


> I don't know, I wonder at what point do you have to concede that MAW104 is a winner?
> 
> It's been doing it for 31 years. Is that not enough?


I already said it's a good balanced fund. But I don't think I would give it a higher status than any other balanced fund that also has a long track record and which is also beating category average. The criteria I listed in post 19.

MAW104 is a good looking fund, but there are several others as well. I would think any of those is an equivalently good pick for a one-size-fits-all fund, for long term holdings.


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## fireseeker (Jul 24, 2017)

Here is a comparison that some may find interesting: the Chou Associates fund.
From 1986 through 2014 -- almost 30 years -- its returns were truly outstanding. Look at what it did around the tech crash. It was one of the very best global equity funds in existence. Plus, its MER was reasonable at around 2% (by the standards of the time).
Over the last five years, Chou Associates has been clobbered. Its 10-year returns are dismal, almost 6% below the benchmark.

So, what happened? Was Francis Chou lucky for 28 years? Did he suddenly forget how to invest?
I don't think so. He is a deep value investor and deep value has been destroyed the last five years. The fund's largest holding is Berkshire Hathaway, operated by another deep value chap. Chou has had a performance record that is every bit the match Mawer's -- but it didn't protect an investor who bought in 2014.

Is the Chou fund worthy of one star, which is what Morningstar gives it now?
Again, I don't think so. The tides have turned against deep value and it could be underwater for a long, long time. But the track record prior to that, and Chou's well-chronicled commitment to a disciplined investing process, suggest he is still a worthy money manager.

Finally, the key question: could this deep, dark turn in returns happen to a fund like MAW104?
Sure. Both funds are well-run and reasonable. The 10-year numbers probably don't fully capture the managers' underlying skill, perhaps overstating it in Mawer's case and understating it in Chou's case.

Conclusion: Past returns are not a guarantee of anything.


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## kcowan (Jul 1, 2010)

james4beach said:


> MAW104 is a good looking fund, but there are several others as well. I would think any of those is an equivalently good pick for a one-size-fits-all fund, for long term holdings.


Maybe I am missing your point James. Which one did you choose and why?


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## james4beach (Nov 15, 2012)

kcowan said:


> Maybe I am missing your point James. Which one did you choose and why?


I don't hold any of them myself. When my family members asked me, I researched and agreed that MAW104 was their best option.

When other friends asked me for advice for an RESP and RRSP, I went looking again and suggested BMO's GGF31148.

In my view, both are equally good alternatives going forward, and there are a handful of others that I would say are also equally good.


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## OnlyMyOpinion (Sep 1, 2013)

fireseeker said:


> Here is a comparison that some may find interesting: the Chou Associates fund... Conclusion: Past returns are not a guarantee of anything.


Not sure why you are now mixing apples and oranges to make your point? I.e. the performance of what is primarily a global *equity* fund with a global neutral *balanced* fund. 

This thread started with jman asking for some advice, maybe you can just tell us what criteria you would use? Perhaps not MF's at all? 
Earlier you seemed to suggest that a new manager who has been around since about the start of the current '10 year bull run' was a positive.


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## AltaRed (Jun 8, 2009)

In all fairness, I think fireseeker was using an example to say that past performance of a fund is no guarantee of future performance and he used Chou to illustrate. We know the 2 funds are not at all comparable. MAW104 depends on performance of the underlying 7 funds and an educated guess on what those allocations are.


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## cainvest (May 1, 2013)

james4beach said:


> I don't hold any of them myself. When my family members asked me, I researched and agreed that MAW104 was their best option.
> 
> When other friends asked me for advice for an RESP and RRSP, I went looking again and suggested BMO's GGF31148.
> 
> In my view, both are equally good alternatives going forward, and there are a handful of others that I would say are also equally good.


I'm curious as to what metrics you used to label GGF31148, MAW104 and others equally good?


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## fireseeker (Jul 24, 2017)

OnlyMyOpinion said:


> Not sure why you are now mixing apples and oranges to make your point? I.e. the performance of what is primarily a global *equity* fund with a global neutral *balanced* fund.
> 
> This thread started with jman asking for some advice, maybe you can just tell us what criteria you would use? Perhaps not MF's at all?
> Earlier you seemed to suggest that a new manager who has been around since about the start of the current '10 year bull run' was a positive.


OMO, I was not trying to suggest Chou Associates and MAW104 are similar investments -- you're right, they are in different classes.

I had followed the thread away from the OP's question into the discussion about how one chooses an appropriate investment. Chou Associates and MAW104 both have had three-decade runs of excellence. But an investor in 2014 would have done badly with one and not the other. How could that have been predicted in 2014?

My first post was along those same lines: a warning that past returns should not be relied upon as the primary reason for selecting a security.

As for explicit advice for the OP, my personal opinion is that you can generally only make two assessments of a fund: Is it reasonably and competently run, and what does it cost. Of those two criteria, I would heavily weight the latter.

So I would personally select ETFs. For someone seeking a balanced fund I would suggest the new class like VBAL and XBAL.
There remains a place for mutual funds for some investors, particularly ones with small accounts or ones who are making monthly contributions. For those investors, James's list is great.
But I don't believe MAW104's track record means it is any more or less likely to succeed over the next five years than any of those other funds, assuming costs are roughly equal.


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## james4beach (Nov 15, 2012)

fireseeker said:


> As for explicit advice for the OP, my personal opinion is that you can generally only make two assessments of a fund: Is it reasonably and competently run, and what does it cost. Of those two criteria, I would heavily weight the latter.
> . . .
> *But I don't believe MAW104's track record means it is any more or less likely to succeed over the next five years than any of those other funds*, assuming costs are roughly equal.


I agree with all of this. After making sure the fund is competently run and has sane management and sane allocations, I don't see any good reason to heavily prefer Mawer over the alternatives -- despite its strong backward-looking performance. There's absolutely no problem with MAW104. It's fine. I think the point fireseeker and I are making is that MAW104 isn't more likely to outperform the other "good balanced funds".

All of this is relevant to the OP; _this isn't academic_. The thread started with them saying they use RBC and we observed that they can't buy Mawer funds there. So.... go ahead and invest in one of the alternatives, other perfectly good balanced funds. There's no reason to bend over backwards just to get into the Mawer one. The OP sounded like they might open a new account at another brokerage just to buy the Mawer fund. I think that's a waste of time & effort.

There's also this earlier thread on Good balanced funds which lists several alternatives.



cainvest said:


> I'm curious as to what metrics you used to label GGF31148, MAW104 and others equally good?


I would use this criteria, listed earlier.



james4beach said:


> I think it's fine to choose any balanced fund which (a) has good diversification and sector exposures, (b) shows enough history to prove management is ok and "reasonably run", (c) has low MER, (d) is at least beating category average which shows it doesn't have a chronic problem or fatal flaw
> 
> And I think many are fine choices based on that: MAW104, RBF1350, or GGF31148 which I've steered friends towards


I would also add, looking at its history to look for strange outliers (such as horrible single years much worse than its peers, likely indicating bad management choices or excessive greed) and look for consistency in the allocations over many years, which shows good and steady methodology of portfolio management.

Basically once a fund passes this criteria... which eliminates probably 99% of funds anyway... I wouldn't split hairs over which one had a couple % CAGR higher returns in the past. That's just me.


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## cainvest (May 1, 2013)

james4beach said:


> I would use this criteria, listed earlier.
> 
> I would also add, looking at its history to look for strange outliers (such as horrible single years much worse than its peers, likely indicating bad management choices or excessive greed) and look for consistency in the allocations over many years, which shows good and steady methodology of portfolio management.
> 
> Basically once a fund passes this criteria... which eliminates probably 99% of funds anyway... I wouldn't split hairs over which one had a couple % CAGR higher returns in the past. That's just me.


I follow you RBF1350 and MAW104 but the BMO fund seems 1) A little short lived 2) It's quartile rank has dipped a bit low for so few years.


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## james4beach (Nov 15, 2012)

cainvest said:


> I follow you RBF1350 and MAW104 but the BMO fund seems 1) A little short lived 2) It's quartile rank has dipped a bit low for so few years.


For the BMO fund you have to look at the primary fund which is BMO Monthly Income A Series, the older one with MER 1.57% created in 1999, with 20 year history.

The D series is simply a lower cost version of the exact same fund. The MER is down to 1.02% so the performance will be exactly the same + 0.55% better each year. Exact same portfolio, lower fee.

I know at first glance the BMO one appears to have a short history but it actually has a 20 year track record, with (adjusting for MER)
10 year CAGR = 7.08%
15 year CAGR = 6.37%
Since inception = 6.38% for about 20 years

Which is about the same as the RBC/PH&N fund.


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## cainvest (May 1, 2013)

james4beach said:


> For the BMO fund you have to look at the primary fund which is BMO Monthly Income A Series, the older one with MER 1.57% created in 1999, with 20 year history.


That chart tells a better story but it still doesn't look like a good choice compared to the others. The first 5 of the last 10 years shows dips below the category and index with two back to back years of a lowest quartile ranking. Over the past 10 years it's barely done better than it's category/index and that's only due to *one* nice return in 2014.


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## james4beach (Nov 15, 2012)

cainvest said:


> That chart tells a better story but it still doesn't look like a good choice compared to the others. The first 5 of the last 10 years shows dips below the category and index with two back to back years of a lowest quartile ranking. Over the past 10 years it's barely done better than it's category/index and that's only due to *one* nice return in 2014.


Even looking at the A series, the higher MER one, shows 5 year CAGR that's 1.8% better than category average and 10 year CAGR that's 0.37% better than average. Add the 0.55% fee reduction boost and that means 10 year performance is now about 1% CAGR better than average. I think that's pretty strong, and it looks consistent over 15 years as well.

I don't think the good result for this one is just due to 2014. It did significantly better than average in 2011, 2014, 2015, and 2018. I view this as pretty consistent, slight outperformance. Along with its good allocations and long history that's enough to convince me it's a contender.

It's now scrolled off the years but I also think this one handled 2008 better than average. It's too bad we're now all looking at these 10 year timeframes that omit 2008 because ability to handle a bear market is a very important characteristic.


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## cainvest (May 1, 2013)

james4beach said:


> I don't think the good result for this one is just due to 2014. It did significantly better than average in 2011, 2014, 2015, and 2018. I view this as pretty consistent, slight outperformance. Along with its good allocations and long history that's enough to convince me it's a contender.


Yes it had good years but 50% of them were below average (09,12,13,16,17) not great IMO. Compare that to the RBF1350 fund which only had 2 years below out of 10. Now it may not be important to you but instead of 10k turning into 20,607 you'd get 22,893 from the RBF fund, so those bad years do add up.


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## AltaRed (Jun 8, 2009)

FWIW, Morningstar doesn't put the BMO fund and MAW104 in the same category (Canadian neutral balanced for the former, Global neutral balanced for the latter). They are similarly, but not directly, comparable. A better comparison is within category. If we give BMO D series the 0.55% boost, 10 yr category different is 0.92 (1.35 against index) vs MAW104 at 3.09 (0.54 against index). Bottom line is both outperform their index and their category in 1, 3, 5, 10 and 15 year periods. That should be good enough for any investor depending on their overall asset allocations. 

Regardless, since I am not fond of the Cdn market as much as others, I'd still stick with MAW104.


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## james4beach (Nov 15, 2012)

MAW104 does indeed have a more international focus. Yes the category differences should be noted.

In any case, someone should pick something they're comfortable with and stick with it. Do lots of research up front and then decide and stick with something. This isn't going to work well if you second guess yourself when we enter a bear market again and then hop to another fund or strategy. An investor must be diligent to make sure they aren't just chasing performance.

A danger facing new investors today is that we've been in a 10 year bull market and all recent performance history is all during the good times. It's easy to have good performance during good times. When bad times eventually come, some transformative things will happen -- they always do -- and you might find yourself in a position where you're no longer sure if the fund (or whatever) you chose is a "good idea".

Which makes initial research all the more important because you need to be ready to fully commit to your choice and not let a bear market shake you out. When MAW104 starts underperforming, you need to stick with it. Even if it underperforms for 10 years, you still need to stick with it* even as you watch the Morningstar rating fall and it starts doing worse than average. It's best to be mentally prepared for this possibility.


_* you don't really have to stick with it, of course you can switch to another fund like XBAL, but you'll probably have optimal results if you stick with it instead of jumping between funds. Studies have shown that most investors do significantly worse than the mutual funds themselves, and that's due to chasing returns and failing to stick to a steady plan_


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## AltaRed (Jun 8, 2009)

And lest we lose sight of ETFs in this mf discussion, VBAL, XBAL and ZBAL remain viable alternatives. VBAL and MAW104 are the choices in our sphere of influence.


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## james4beach (Nov 15, 2012)

AltaRed said:


> And lest we lose sight of ETFs in this mf discussion, VBAL, XBAL and ZBAL remain viable alternatives. VBAL and MAW104 are the choices in our sphere of influence.


XBAL looks like a strong one as well. And it should be noted that Blackrock/iShares has a much longer history of experience running these kinds of ETFs. Vanguard is new to the concept, but iShares has run the US based AOK/AOR/AOM for a very long time -- even during the last bear market I think.

Assuming there's some institutional knowledge and experience to benefit from, I'd probably prefer XBAL as the ETF-based balanced fund of choice. There isn't enough history in these for my taste but iShares at least probably shares some knowledge from the US side of operations.

iShares Canada also probably learned lessons from their poorly run XTR, a balanced fund that was around long before VBAL became all the rage. I keep pointing out that VBAL was not the first of its kind in Canada... XTR was, after it stopped being an income trust fund, it was indeed a "low fee diversified balanced fund holding index ETFs".


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## AltaRed (Jun 8, 2009)

Vanguard has the target funds in the USA too that are asset allocation funds with bond components. I'd be careful trying to promote one family over the other. My view is Vanguard has a history of being more receptive to its members like a non-profit and more than anyone else has been the cheerleader of lower MERs. That all said, Blackrock is the elephant and I wouldn't count either company out in their offerings, but one has to wonder why it took Blackrock so long to overhaul its AA underperformer in Canada.

P.S. I like VBAL over XBAL due to its hedged global bond component. That may pay off....or it might not.

Added much later: Despite our family being primarily in Blackrock iShares ETFs vs Vanguard ETFs, I do have another beef with Blackrock that torques me.... Instead of reducing MERs on some long standing ETFs, they spun out new product with lower MERs to meet the competition, and did nothing for those with huge unrealized gains in their earlier products. It is going to cost them IF/WHEN we have another -35% equity cycle allowing individuals to do swaps. A few anecdotes: Why is the MER of XIU so much higher than that of XIC? Why is the MER of XWD so much higher than that of XAW? Wjy is the MER of XDV that much higher than that of XDIV? Very similar products that cannot have that much difference in administering the higher MER ETFs.


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## My Own Advisor (Sep 24, 2012)

I was just going to say, why not go with an all-in-one ETF? Especially if you desire a rigid 60/40 split to be maintained. 

I also like Vanguard (a bit more) given it's structure: the unitholders are the owners of the company so there is a huge bias to maintaining transparency and lower-costs.


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## AltaRed (Jun 8, 2009)

I believe only US mutual fund unitholders are owners but it doesn't matter since that is indeed the point, i.e. returning profits back to unitholders in the form of reduced MERs.


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## cainvest (May 1, 2013)

AltaRed said:


> And lest we lose sight of ETFs in this mf discussion, VBAL, XBAL and ZBAL remain viable alternatives. VBAL and MAW104 are the choices in our sphere of influence.


For sure the ETFs are a good choice, I'll likely be adding VBAL to my portfolio next year.


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## My Own Advisor (Sep 24, 2012)

I'm tempted to own some VGRO for my wife's portfolio over time (namely RRSP). This way, she doesn't have to/want to deal with the dividends like I do so potentially starting a position at some point and build up a few hundred shares.


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## james4beach (Nov 15, 2012)

My Own Advisor said:


> I was just going to say, why not go with an all-in-one ETF? Especially if you desire a rigid 60/40 split to be maintained.


My answer to "why not go" with the VBAL or XBAL is that we don't yet know how the fund companies will manage these portfolios long term. Yes it's true they will stick to a 60/40 split, but beyond that, what allocations they choose, which ETFs they rotate in & out of, and how they might adapt or change from year to year is entirely at the manager's discretion. For all we know, they could add junk bonds to the portfolio, or go heavier into emerging markets. Nothing in the prospectus stops them.

It's really not very different than a traditional portfolio manager, and therefore, the skill of the manager still matters. The big difference is that the fee is much lower, but if the manager is going to do a bad job at portfolio management, this also matters a lot. It will take years to see if this is the case and there will have to be important market events (like significant shifts in themes) to give management a chance to screw up.

No, it doesn't change anything that these use index ETFs. The challenging part is portfolio management and withstanding human tendencies such as performance-chasing, fear & greed. All professional money managers face those dangers; a Vanguard manager is not magically immune to these.

An index ETF on its own is a simple thing. However a *portfolio* of indexes with the power to constantly fiddle with them is a totally different beast.

The big warning sign you can immediately see is that neither Vanguard nor iShares commits themselves to a benchmark index. This shows they are making zero commitment to a true indexing approach... these are actively managed funds implied to be passive indexing. And with no benchmark index, the fund company has absolutely no feedback mechanism that keeps the manager on track, or accountable for their performance.

I don't like the VBAL/XBAL structure. I think the marketing is misleading, and lack of benchmark is potentially disastrous. The illustrative benchmarks they use for historical performance estimates is a fundamentally flawed approach as it's a textbook case of hindsight data mining, and they don't commit to using the same benchmarks or construction going forward. Flawed at its core.

Maybe I'll create my own portfolio ETF too, back-fit it to really high performing allocations and talk about how well it would have performed historically, then don't actually require it to track anything specific... I'll just wing it with the allocations (whatever I feel like). I will market them as only holding index ETFs, which is technically true, but also irrelevant. With no benchmark index to track, I don't have anyone to answer to and nothing to keep me accountable. Come on guys, really?


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## OnlyMyOpinion (Sep 1, 2013)

^ Re the above post. 
New readers should note that James is under the impression that these are actively managed 'etf portfolios' in spite of (Vanguard at least) describing them as passive portfolios. He believes they will be devoting analysts to predicting the markets and changing the etf allocations they have established in order to chase performance (all for a low MER). 

Again, this is his interpretation and I believe it to be wrong.
I encourage individuals to do your own due diligence and decide the nature and intent of these asset allocation funds.
Note that I hold some of these funds so my opinion is informed but still OMO.

I believe there may be some helpful links in some of our other threads. Search for "VBAL" in the thread title to locate them.


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## AltaRed (Jun 8, 2009)

Except the providers' own credibility and reputation longer term. I don't have any issue with James indicating there theoretically could be such wild moves, but to make it sound like the wild west in the 1800's is back in vogue, seems a bit over the top. I suspect the providers will do a much better job of asset allocations, both geographically and asset type, than 95% of investors which have been proven to under perform the market in just about anything they do. I would also trust Vanguard to do a more conscientious job than profit oriented Blackrock which doesn't much care*, in my opinion, about the retail investor in its global operations. 

I think it would be more responsible in this thread to be objective about the choices. Costs do matter to some degree, subject to the overall success of the fund manager, in these 'balanced' products, whether mutual funds or ETFs. None of us really know where the horses will be positioned on the track in any given 5, 10 or 15 year period until we get there.

* although partner RBC in the Canadian iShares arrangement might


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## cainvest (May 1, 2013)

Yup, ETFs and mutual funds can change their holdings ... that's a risk everyone will take buying many funds. Fireseekers example of the Chou fund shows how things can go wrong over time. That being said, I have no real concern about Vanguard given their overall track record and all investors should be watching their portfolio anyways for signs of trouble.


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## cainvest (May 1, 2013)

james4beach said:


> The big warning sign you can immediately see is that neither Vanguard nor iShares commits themselves to a benchmark index.


So why not just compare it yourself against the other funds you would have bought?


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## james4beach (Nov 15, 2012)

cainvest said:


> So why not just compare it yourself against the other funds you would have bought?


Because I'm not the fund manager. The benchmark provides feedback to the fund manager, to keep them on track. It also provides guidance on what they should be doing, provides accountability if they are straying. None of that is present in VBAL or XBAL and I really question their wisdom of creating an ETF with no benchmark and then calling it "passive".

The prospectus should have been written to commit the fund to a specific asset composition or an external index which would at least give them something to track. In my eyes, it's only a "passive index ETF" if there's an index it's tracking. The point of an ETF is supposed to be that it's a robotic, dumb vehicle that just tracks something and therefore doesn't have much room to stray from the ideal. That's not what VBAL/XBAL are.

They don't even define their ideal/index, and have limitless room to stray from it. These are not passive index vehicles.

But these things can do virtually anything they want as long as they remain roughly 60/40. It seems that some investors (above) have lots of hope & faith that the professionalism of Vanguard can provide self discipline to provide good results in any case, and that may be true. I just think the funds are structured poorly.

I also think it's index fetishism. Vanguard is throwing around the words "index" and "passive" and "ETF" even though there's no index, no benchmark, and it's not passive. This really makes me question Vanguard's professionalism.


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## cainvest (May 1, 2013)

james4beach said:


> The prospectus should have been written to commit the fund to a specific asset composition or an external index which would at least give them something to track. In my eyes, it's only a "passive index ETF" if there's an index it's tracking. The point of an ETF is supposed to be that it's a robotic, dumb vehicle that just tracks something and therefore doesn't have much room to stray from the ideal. That's not what VBAL/XBAL are.


You're right, it's not an "index" ETF though it contains (but is not limited to) index ETFs. It operates much like the mutual fund counterparts but with a lower MER.

An index ETF should be "robotic" but VBAL isn't an index ETF! BTW, they state that in their investment strategy.


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## My Own Advisor (Sep 24, 2012)

James, compared to > 80% of the available financial products out there - VAL or XBAL, or VGRO or XGRO or DGRO (the list goes on) will serve these investors very, very well. 

Also, I wouldn't blur the lines between "passive" investing and index investing - these are not the same things as far as terminology goes.

"Passive" = buy-and-hold portfolio strategy for long-term investment horizons. You could be passive with GICs or cash. Read in, minimal trading.
"Indexing" = a form of passive investing which you know about well I assume.

Vanguard has done a world a good to the common investor. I would hardly challenge their "professionalism" but that's just me.

ETFs don't have to be robotic at all. They are funds, that can be traded on an exchange.


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## AltaRed (Jun 8, 2009)

I don't see the use of 'active' or 'passive' here https://www.vanguardcanada.ca/individual/etfs/about-our-asset-allocation-etfs.htm or here https://www.vanguardcanada.ca/advisors/en/what-we-offer/asset-allocation-etfs-tab or the VBAL sheet https://www.vanguardcanada.ca/indiv.../etf/portId=9578/assetCode=balanced/?overview or the VBAL fact sheet https://www.vanguardcanada.ca/individual/mvc/loadImage?country=can&docId=12397 or the ETF Facts https://www.vanguardcanada.ca/individual/mvc/loadImage?country=can&docId=12387 or to my knowledge in the prospectus https://www.vanguardcanada.ca/individual/mvc/loadImage?country=can&docId=7299

I do see many references to the word Portfolio which is what these are actually, a one fund portfolio and Vanguard specifically says the benchmark is an 'internal composite'. The point being: Vanguard is very clear about what these ETFs are. The investor can also look at Morningstar analysis where Morningstar does compare VBAL to Global Neutral Balanced. I suspect with all this data, there is plenty for the investor to analyze and pass judgement on whether this is a vehicle they wish to consider. 

I think, James, you have made interpretations and assumptions that are not warranted. There are a number of actively managed ETFs out there based on 'made up' indices. At what point does an ETF say it is index, or non-index, active (meaning what exactly?) or passive (meaning presumably a published index by an independent third party?). The lines are blurred given what TD also seems to be now doing via their 'index provider'.

Added: I, for one, do NOT want Vanguard to be handicapped on its global allocations, but I do want them committed on the equity/FI ratio. They have more information and expertise than I do and that is precisely the reason for owning them! No index can do that and I suspect they had no right(?) to use the Morningstar Global Neutral Balanced 'category' as a benchmark. Note that is 'category', not index.


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## Eclectic12 (Oct 20, 2010)

james4beach said:


> ... The big warning sign you can immediately see is that neither Vanguard nor iShares commits themselves to a benchmark index.


What's the benchmark index that you use to evaluate MAW104 type funds against?

Maybe I missed it but I don't recall there being such an index, no matter whether it a MF, ETF or whatever.




james4beach said:


> ... With no benchmark index to track, I don't have anyone to answer to and nothing to keep me accountable. Come on guys, really?


Possibly ... but then again, won't that damage Vanguard's reputation with those who expect something more professional than say a bank MF subsidiary?
Isn't their target customers likely the same ones who would cry foul and scream about it?


Cheers


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## Eclectic12 (Oct 20, 2010)

james4beach said:


> cainvest said:
> 
> 
> > So why not just compare it yourself against the other funds you would have bought?
> ...


Hmmm ... if there's an external index out there for this type of fund, what is it?

Sure, you aren't the fund manager so there is no guarantee they will follow this external index but knowing what the index is should help track how good or bad or professional Vanguard is being, n'est pas? 

Or is there some reason to wait years and years instead of having the more immediate feedback that skipping a benchmark index is alleged to be missing?



Cheers


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## james4beach (Nov 15, 2012)

Eclectic, I'm talking about structure and design. They don't pin themselves to a benchmark or index, by design. You or I can of course use some other external benchmark to our heart's content. But I'm disappointed that Vanguard didn't use a benchmark and I think it will hurt their long term results -- it's bad design. The older and better established US iShares AOM actually uses an external S&P benchmark.

VBAL is a fund, under the discretion of a portfolio manager, who is trying to run a 60/40 and has a ton of freedom in doing so. It's what MAW104 and every other balanced fund does as well. My point about the benchmarks is to emphasize that this is nothing like "index ETFs" that we're used to. It's a managed portfolio.

VBAL and XBAL will probably turn out to be sensible, low fee balanced funds with OK performance. There is however the danger (as with any managed portfolio) that the fund manager can screw things up badly.


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## AltaRed (Jun 8, 2009)

True, ETFs all started out as index ETFs and then the floodgates opened up with boutique this and boutique that. We have all kinds of stuff from a host of providers, enhanced this, low volatility that. More than anyone can possibly grasp, Why do you have such a burr under your bonnet about the balanced products from Blackrock and Vanguard. Why not name BMO, Purpoe, Horizons, Wisdom Tree, etc, etc, etc, in your rant? I repeat: Vanguard never refers to their AA ETFs as index ETFs. They call them 'Portfolio' which is exactly what they are.


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## james4beach (Nov 15, 2012)

AltaRed said:


> Why do you have such a burr under your bonnet about the balanced products from Blackrock and Vanguard. Why not name BMO, Purpoe, Horizons, Wisdom Tree, etc, etc, etc, in your rant?


Because a perception has grown among investors, which I've seen at CMF and Reddit, that (a) these are index ETFs (b) passive just like couch potato and (c) the % allocations we see today are static and constant

I think people see them as something they are not and I'd like people to know what they really are. For example, I'm sure most people know that you shouldn't invest in a mutual fund that's only been around for just a year. And yet for these things, people (including at CMF) are embracing them even with zero track record and no demonstrated history. Why?

Maybe you can answer the "Why" for me. I _think_ index ETF fetishism is clouding peoples' judgement.

Like I said, VBAL and XBAL performance will probably be fine, about average for a managed balanced fund.


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## cainvest (May 1, 2013)

james4beach said:


> Because a perception has grown among investors, which I've seen at CMF and Reddit, that (a) these are index ETFs (b) passive just like couch potato and (c) the % allocations we see today are static and constant


Well then they didn't read the objective or investment strategy did they ... there is no fix for those people for not learning before they buy.
Also, from what I've been reading, people are NOT seeing it as an index ETF as they are being directly compared to balanced funds, not index ETFs.


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## AltaRed (Jun 8, 2009)

james4beach said:


> I think people see them as something they are not and I'd like people to know what they really are. For example, I'm sure most people know that you shouldn't invest in a mutual fund that's only been around for just a year. And yet for these things, people (including at CMF) are embracing them even with zero track record and no demonstrated history. Why?
> 
> Maybe you can answer the "Why" for me. I _think_ index ETF fetishism is clouding peoples' judgement.


James, I think your repeated posts on this subject, in this thread among others, and others like myself, have made it abundantly clear these are not index products, just like perhaps another 500 ETFs out there are not index products either, but often pass themselves off as index products. Taking on the burden of this cause is admirable, but few are likely listening perhaps because they know that already.

As to why people are embracing them? For the reasons that have already been stated in the past, and are fairly simple to understand. In the case of Vanguard, the 3 main AA ETFs are based on 7 actual index ETFs that have been around for some time. This product simply re-weights 7 deck chairs according to the judgement of the fund manager, which is a US based group within Vanguard that is a sub-advisor to a host of Vanguard products, likely including the US target funds. We are putting our faith on that sub-advisor to make those judgements based on Vanguard's long standing reputation and history at a cost that is far less than that of competing actively managed mutual funds. This is not some up and coming hot shot with no track record that we've never heard about, or some independent money manager, many of whom we see on BNN Market Call, and show they are little better than a roll of the dice on their picks.

The Vanguard offerings are thus good enough for me and the thousands of others to take a chance with a high, but not guaranteed, probability of success. I am not ready to commit 100% of a portfolio to it, or to recommend my spouse and ex-spouse do that either, but there may well be a time for doing exactly that....or as a simple diversification precaution, maybe 2-3 of these 'global neutral balanced' offerings, just in case one of them mis-steps for a year or two. I can see, at some point in time, many investors having 7 digit portfolios split between MAW104, VBAL and XBAL (or ZBAL), or some other combination of VEQT, VBAL, VGRO, etc.


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## james4beach (Nov 15, 2012)

AltaRed said:


> As to why people are embracing them? For the reasons that have already been stated in the past, and are fairly simple to understand. In the case of Vanguard, the 3 main AA ETFs are based on 7 actual index ETFs that have been around for some time. This product simply re-weights 7 deck chairs according to the judgement of the fund manager


What you wrote above is incorrect and is the kind of misconception that I'm trying to address -- so now you can see why I'm hammering away at this.

They currently contain 7 index ETFs but there is absolutely nothing that commits themselves to continuing to use just these 7 ETFs. They may abandon one of them next month and start using something totally different later. A decade from now, they may hold 10 completely different ETFs.

They are not based on those, do not commit to using them, and do not even mention them in the prospectus. This is unlike an index ETF that is designed to track a specific index. It's totally at the discretion of the manager but there is a popular misconception that the funds are simply wrappers for these 7 known-and-good ETFs. Not so.


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## AltaRed (Jun 8, 2009)

Fair enough that there is no commitment to ANY of the current 7 constituent ETFs. I can only see the 7 underlying ETFs changing if one of them terminates or is re-born into something else, or it is less costly to hold the underlying securities directly, or derivatives of same. I am not going to lose sleep over it any more than the chance of FTSE, S&P or MSCI changing their indices for any broad market, or the risk of any one common equity, e.g. ENB, blowing up tomorrow.

Added later: I think one thing most investors should be aware of and may not be... is that changing allocations will most likely result in some phantom re-invested capital distributions, potentially more than the average ETF. It is going to depend on the relative volatility of global equity markets against each other, global bonds vs domestic bonds, and of course, equty vs bond performance. I am guessing the fund manager will mitigate these effects as much as possible, but there will be an effect and that effect could be on the same level as an individual re-balancing a personal portfolio of common stock and bonds on an annual basis. Doesn't make this bad or worse, but is an implicit consequence of asset allocation.


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## like_to_retire (Oct 9, 2016)

james4beach said:


> They currently contain 7 index ETFs but there is absolutely nothing that commits themselves to continuing to use just these 7 ETFs. They may abandon one of them next month and start using something totally different later. A decade from now, they may hold 10 completely different ETFs.
> 
> They are not based on those, do not commit to using them, and do not even mention them in the prospectus. This is unlike an index ETF that is designed to track a specific index. It's totally at the discretion of the manager but there is a popular misconception that the funds are simply wrappers for these 7 known-and-good ETFs. Not so.


Sure, and just like any ETF and Mutual Fund, _"They may abandon one of them next month and start using something totally different later."_

Perfect timing, check out the TDAM e-series change thread. Nothing is guaranteed, even if it's in a prospectus. Things change, so you go with the best available information at the time.

The 7 index ETF's have been around longer than a year, so you have to consider this not the same as new ETF's that are only a year old compared to the ones where they contain those long term ETF's.

ltr


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## Eclectic12 (Oct 20, 2010)

james4beach said:


> Eclectic, I'm talking about structure and design. They don't pin themselves to a benchmark or index, by design ...


I already go the part about the structure. 
What I was unclear on what index they could have used ... hence my question.




james4beach said:


> ... The older and better established US iShares AOM actually uses an external S&P benchmark.


Would it have been that hard to say "S&P Target Risk Moderate Index" would be an example to look at?




james4beach said:


> ... VBAL is a fund, under the discretion of a portfolio manager, who is trying to run a 60/40 and has a ton of freedom in doing so. It's what MAW104 and every other balanced fund does as well. My point about the benchmarks is to emphasize that this is nothing like "index ETFs" that we're used to. It's a managed portfolio ...


Since MAW104 as well as VBAL, XBAL and ZBAL are all being talked about as alternatives as opposed to say XIC, XSP, it reads to me that this point is understood.


Cheers


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## AltaRed (Jun 8, 2009)

James has been going on about a benchmark but I am unaware of a published benchmark for a global neutral balanced index. Morningstar has a Category for it for mutual funds and applies VBAL against it, but what does one do for VGRO or VCNS? 

Nothing prohibits any fund in the global neutral balanced category from tilting to US vs EAFE vs EM vs? Or to geographical allocations to bonds. Should it be hardwired to cap weighting across the world. If so, why? I much prefer giving Vanguard judgement to vary allocations just like I do with Mawer.


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## james4beach (Nov 15, 2012)

AltaRed said:


> Fair enough that there is no commitment to ANY of the current 7 constituent ETFs. I can only see the 7 underlying ETFs changing if one of them terminates or is re-born into something else, or it is less costly to hold the underlying securities directly, or derivatives of same. I am not going to lose sleep over it any more than the chance of FTSE, S&P or MSCI changing their indices for any broad market, or the risk of any one common equity, e.g. ENB, blowing up tomorrow.


True enough and right, FTSE or S&P can also change the composition of their own indices.



like_to_retire said:


> Sure, and just like any ETF and Mutual Fund, _"They may abandon one of them next month and start using something totally different later."_
> 
> Perfect timing, check out the TDAM e-series change thread. Nothing is guaranteed, even if it's in a prospectus. Things change, so you go with the best available information at the time.


Good points and I agree. And interesting about TDAM, I didn't read that thread yet.


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