New Mutual Fund Purchase & Portfolio Update
Today I purchased TD US Index mutual fund with the capital and profit from my former holding, CIBC Energy. TD US Index is an index fund which tracks the S&P 500. As stated before I wanted to stay away from sector-specific funds (like the Energy funds), to remain more diverse and not risk devastation at the hands of fluctuating commodity prices.
When I looked around for a good diverse Canadian equity fund, I couldn't find any that didn't include a portion of energy. It's obvious of course, the oil company's are the biggest most successful component of Canada's economy as of late, thus every Canadian equity or index fund worth its salt seems to be full of energy.
Thus I only searched for US funds. It's not a problem to hold them in your RSP, now that the foreign content limit on RSP's has been lifted. So I've settled on this fund which will emulate the returns of the S&P 500; thus I am basically banking on the strength of the US economy, rather than Canada's.
As for the remainder of my mutual fund portfolio, here are my updated holding values (previous full update can be found here):
Discretionary Account:
RSP Account:
By Ginsberg @ 11:18 AM [Post Link]
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3 Comments:
Are your holdings with TD? You should look into TD eFunds. They have extremely low MERs.
You are wise to look beyond Canada as the Canadian indexes are not as well diversified as those in the US and are energy-heavy as you noticed.
I wouldn't "bank on the strength" of anything. In other words, don't try to time the market at all because you have no idea what is going to happen. Just pick an allocation, invest monthly, and rebalance once or twice a year to keep your portfolio allocations where you want them.
I would echo Dave's suggestion. TD US Equity has a MER of 0.55%. The same TD eFund has a MER of 0.33%. Better yet, if you can look into the IVV. Has a MER of 0.09%!
At first I thought eFunds was a fancy brand name for Exchange Traded Funds, but I looked into it and I see you're totally right. The 'e' series of mutual funds simply appear to be the same funds, with lower MER's because you sign an agreement to only manage the holding online (and not take up the time of any TD employees).
I think I'll wait the 90 days to avoid an early withdrawal fee, and then switch into the 'e' fund. If you've done the math, those expense ratios add up to thousands of dollars over the years.
Capitalist, what do you mean by IVV?
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