# Need Help Picking GWL Funds



## Ag Driver (Dec 13, 2012)

I need some help selecting funds for my employer matching RSP. I want it to be similar to the couch potato strategy. Right now I hold eseries index funds around a 30/30/30/10 split. I'm age 28, so I will soon be dropping down to a 25/25/25/25 split. I am thinking I will set the RRSP up for 25/25/25/25 for simplicity sake as I will just start contributing and the amount is minimal at this time.

From my minimal knowledge, I believe, to best match a couch potato portfolio I should be picking the following 4 funds:

*Canadian Dividend and Large Cap (GWLIM) @ 0.733%
Canadian Bond (JF) @ 0.738%
U.S. INDEX REGISTERED (GWLIM) @ 0.633%
International Equity (SPRUCEGROVE) @ 1.072%*
*Average 0.794% MER
*
The reason I chose SPRUCEGROVE over SENTANA is because SPRUCEGROVE tries to emulate "a well know international index". 

What do you guys think? 




> FUNDS	ANNUALIZED CHARGES (as at November 29, 2016)
> 
> *Asset Allocation Funds*
> Conservative - income oriented, lower risk
> ...


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## AnonymouslyInvesting (Nov 29, 2016)

I like it...most people make their DC contributions far to complicated with far to much overlap, but you've avoided this.

Check out the geographical mix in the International Equity Fund. These usually have a large weighting in US securities, up to 50 or 60%, so you're in effect becoming very overweight US equities by having that plus the US Index Fund. Most pundits think CDN equities will outperform next year too with the rebound in profitability of resource companies. I think Canada and the US are the place to be.

Also, consider the duration of the Bond Fund. If it is long, I'd avoid it. Interest rates tend to move in very long trends (40 or 50 years) and we are likely bottoming (peaking for bond prices). Going forward, even if rates move up slowly as global economic conditions improve, the fund will be underwater if the duration is long (i.e. investing in long-dated bonds).

You're pretty young, and we are just breaking into a 16 year bull cycle (we are probably 2 years in), so the heavy weighting to equities is appropriate.

Personally, my pension is ~30% CDN equities and ~70% global equities.

Hope that helps...feel free to message me with any questions.


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## OnlyMyOpinion (Sep 1, 2013)

AnonymouslyInvesting said:


> ... we are just breaking into a 16 year bull cycle (we are probably 2 years in), so the heavy weighting to equities is appropriate...


WOW! Finally...someone on CMF who knows what is going to happen in the future. For 16 years no less. Welcome! Where have you been all of our lives.
Can I pm you too?

PS. Sprucegrove has only ~3% in US equity


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## AnonymouslyInvesting (Nov 29, 2016)

In that case, I'd probably have a heavier tilt to US equities than the International Sprucegrove...at least for the near term since they do have a heavy weighting in the UK. Perhaps 15% International and 35% US. 

Fact is, the markets have moved in ~16 bull and bear cycles, and we broke out of a sideways market that was in place from about 1998 to 2013. All bull runs have corrections, so it's not a straight line, but we are entering a bullish era.

Do you just give your 'Opinion' exclusively by criticizing people who are trying to help, or do you ever actually make a market call and put yourself out there??


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## OnlyMyOpinion (Sep 1, 2013)

AnonymouslyInvesting said:


> ... Do you just give your 'Opinion' exclusively by criticizing people who are trying to help, or do you ever actually make a market call and put yourself out there??


That was skepticism - not criticism. 
When someone shows up with 2 posts, both of which claim to know the future of the markets, and both of which invite us to email/message you, I am frankly skeptical of that claim - not critical of the person. And I begin to wonder, what is your gig?

I generally post to inform and contribute to the discussion (links, facts, my own experiences, case in point - correcting your assumption re/ US content).
No, I'm not smart enough to make market calls. I am successful however with a large and diverse long-term portfolio, built over the years in a diy fashion.
I do listen to opinions on individual equities and market trends, and I will read yours. But I would never invest based solely on someone else's claim to know what I should do with my money, especially if it entails slicing a piece off for their advice.


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## OnlyMyOpinion (Sep 1, 2013)

BTW Ag Driver, 
As with AI, I think you have the right general approach - maximize employer maching, stay with low mer, lean to equity, think long term, and make sure the internal holdings of your chosen funds are consistent with the exposure you are planning.


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## STech (Jun 7, 2016)

I maximize my employer's matching into the lowest cost index fund offered. Then once in a year I transfer the full amount into my own RRSP account. I kept things simple, and costs down.


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## Ag Driver (Dec 13, 2012)

Thanks for the input guys.

Initially I was hesitant on Bonds. As of right now I am even contributing more towards GIC's vs Bonds....thus I was leaning towards Money Market Funds for the RSP. Sticking with long term in mind I thought I would remain with my gut choice of Bonds.


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## STech (Jun 7, 2016)

Ag Driver said:


> Thanks for the input guys.
> 
> Initially I was hesitant on Bonds. As of right now I am even contributing more towards GIC's vs Bonds....thus I was leaning towards Money Market Funds for the RSP. Sticking with long term in mind I thought I would remain with my gut choice of Bonds.



Why are you so conservative at your age? I'm 10 years your senior, and have no bonds, and never bought a GIC. If you have a mortgage, treat it as your bond portion. If you're saving up for a house, then I guess GICs might make sense. Otherwise, you have a tonne of time to recover any potential loses, and you most certainly need growth in your portfolio.


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## Ag Driver (Dec 13, 2012)

STech said:


> Why are you so conservative at your age?


I'm not sure I would call 90% equities "so conservative". 

All of my investments at this time are self-directed. The only rrsp account I have at this time will be my company matching program. Due to the fact it will hold only 1 to 5% of my total investment I would say that overall my portfolio is still fairly aggressive. 

I am also of the opinion that my mortgage/home should not be a part of my retirement portfolio. I still need a home to live in in retirement, and I am not counting on downsizing and cashing in home equity in order to retire.


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## AltaRed (Jun 8, 2009)

My view would be that unless you are going to tap into this RRSP (if you even can) for HBP purposes, and given this RRSP will be a small part of your investments, I wouldn't hold any Fixed Income in this RRSP at your age. I'd start to focus on that component about age 40. Going 100% equity in this account is not much of a speculative bet due to the employer matching component. If you can 'sleep at night' with equity market volatility, I'd keep it to 3 equity funds. 

Note: That doesn't mean you should not have some Fixed Income somewhere. It is a lot easier to sleep at night if you have some GICs or HISA funds close by for Black Swan events.


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## STech (Jun 7, 2016)

Ag Driver said:


> I am also of the opinion that my mortgage/home should not be a part of my retirement portfolio. I still need a home to live in in retirement, and I am not counting on downsizing and cashing in home equity in order to retire.


Take the money you're putting into bonds and make extra mortgage payments. Once the mortgage is paid off, start buying bonds.


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