# TD Mutual Funds



## Bighairybeast (Feb 24, 2011)

Currently my RRSP contributions have all been due to my banks recommendations as they were done before starting on these forums.

As of now I have mutual funds in:

TD Monthly income 40.58%
TD Balanced Growth 38.15%
TD Dividend Growth 21.27%

The monthly income and balanced growth I've had for a few years and are contributed to each paycheck. The dividend growth was recently added out of a lump sum bonus. If my math is correct I'm currently sitting at <0.5% return.

My only other RRSP holdings are two 5 yr Finincial GIC plus RSP's. 

I have read that TD E-series funds are recommended on here, but I'm not sure if my mutual funds fall in this category. I have another bonus soon to be added to my RSP account and was possibly going to add it to my mutual funds and increase my regular contributions. When I signed up for my mutual funds I was told historically their returns are quite good over 10+ years but after 5 years I'm not seeing it.

For now I'd like to stay with TD to keep things simple for myself, but am I going the right way or wasting money in fees?


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## fatcat (Nov 11, 2009)

you do realize that you are paying an average of almost 2% expenses for these funds whereas the e-series funds charge in the range of .3-.4%

this means you will have 1.5% more in your pocket at the end of the year

(assuming that all funds perform the same)

if you are going to buy and hold and build then i would switch to e-series, there is no compelling evidence to suggest that the higher expense funds are going to do any better over time

i stand to be corrected ...


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## OhGreatGuru (May 24, 2009)

TD Monthly income is well rated in its class.
TD Balanced Growth & TD Dividend Growth are mediocre in their ratings.

All 3 have high MERs compared to index funds.

There will be a huge overlap in the holdings of these fund, so you are gettting the appearance of diversification without the reality.

Each of these is a balanced fund with varying income/equity ratios and distribution objectives. Even if you wanted to stay with a balanced fund it makes no sense to have 3 in one account, rather than choosing one that suits your investor profile.

TD e-funds are index funds that can only be purchased through on-line banking - that way they achieve the lowest MERs for index funds. See article at http://www.moneysense.ca/2011/05/10/td-e-series-accounts-not-very-hard-to-set-up/

For more on index investing read about the couch potato portfolios starting at http://www.moneysense.ca/2006/04/05/couch-potato-portfolio-introduction/


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## humble_pie (Jun 7, 2009)

beast your returns got the big wallop in 2008/09. Plus you bonds in balanced fund have not been paying much these past few years, so no return there after the management fee is subtracted. Plus you income fund includes different kinds of short-term paper, not paying much either. All this adds up to the feeble effect you've noticed.

where i think you've done a super job is working diligently & rationally at all this. Saving up in a disciplined manner. Not losing the money. Finding a half-decent advisor (cannot expect dazzling from a bank representative; plus i suspect that this one heard you to say at the beginning, when he was preparing your profile, that you don't care for risk.)

so here you are now, in very good shape. Plus you're willing to learn. Who could ask for better.

and best of all, congratulatins on the frequent bonuses.

ottomy here's what comes to mind about your account:

- i wouldn't buy any more mutual funds, as other posters are carefully laying out for you. I'd buy efunds, as they suggest. Once an account has about 50k, it makes more sense to buy even cheaper etfs, although these have stock exchange commissions, which is why smaller accounts tend to take the efunds route first, since transactions are free.

- the critical question is do you think the favourable bull market will continue. Or do you think bear is coming so must take shelter. There are countless experts to be lined up on either side of this question. In fact plenty experts right here in this forum 

once you have got a grip on this question, the choices for an efund account become easier. If the former - ie markets will stay the course & continue to rise although perhaps not until the fall - then commencing the td efund dividend fund would be a great idea. If you really wish to stay with your td mutual funds, then you could simply top up the existing td dividend fund.

on the other hand if you are bearish then an interest-bearing efund, something like a short-term bond fund, or similar to your existing income fund, would be good.

re the balanced fund: many folks don't care for these because they usully have significant MERs, often almost as high as a pure equity fund, yet they hold a considerable proportion of bonds which should be cheaper to manage. In other words the investor is paying far too high a fee for what is essentially a simplistic product. Even the stocks in a typical balanced fund are no-brainer large caps.


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## brad (May 22, 2009)

The only thing I'd add to what has been said is if you decide to go for ETFs instead of TD eFunds, just be sure you research the MERs of those ETFs first and compare them against their eFunds counterparts. As a general rule ETFs have lower MERs than funds, but the eFunds MERs are so low that you can find quite a few ETFs whose fees are actually higher.

There's a great series of articles about this from Canadian Couch Potato, available here: http://canadiancouchpotato.com/2010/02/22/unpacking-etf-fees-part-1/

For example if you weren't careful you might go for the Claymore Canadian Fundamental Index ETF with an MER at 0.65 whereas TD’s eSeries Canadian Index fund has an MER of just 0.31 (or it did when I did this comparison a year or two ago).

Bottom line: As a general rule ETFs are the way to go on portfolios over $50K, but choose your ETFs carefully to find ones that are cheaper than the eFunds.


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## Bighairybeast (Feb 24, 2011)

Thanks for all the opinions, ideas, and links. I had a feeling after reading these forums that I was paying a lot of fees (which seem pretty hidden to me as statements only showed contributions and dividends). I was content to know that at least I was contributing to RRSP and not losing money. Now I'll definately do a lot more of my own research rather than taking just listening to my bank representative.

Thanks


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