I would like to open up a self-directed RRSP with BMO InvestorLine.
I am 44 years old, fit the " Balanced Growth " profile or at least can accept moderate risk, and my RRSP is worth approx. $ 100 K. After much thought I have come up with the following portfolio:
40 % Fixed Income; 60 % Equities
Fixed Income - all with PH & N. 50% with Total Return; 30 % High Yield and 20 % Short Term B & M
Equities - 50 % Mawer Canadian Equity
15 % RBC O'Shaughnessy US Value
10 % RBC O'S US Growth
25 % Mawer World Investment
Should I hold PH & N Bond Fund as well as Total Return ? Would RBC O'S Canadian & International Equity be OK instead of the (2) Mawer funds ?
Any thoughts would be appreciated. Thanks, Glenn.
BMO Investorline is fine, but it can do a lot more for you than buying Mutual Funds.
The funds you have chosen have reasonable MER's - about, 1.6%, I think, but the funds must still overcome this compared with say an index based ETF like XIU with much lower MER and likely higher dividend.
If you deal through BMO Investorline, there will be a sales charge for PH&N funds each time you buy, sell or add to your holdings - not sure about the others you have chosen, but you should check, because this adds up. It would be better to deal directly with PH&N. In fact, you could do worse than buying their equity funds (like PH&N Div Income Fund) along with their bond funds. Their equity fund MER's are about 1.2% or less.
Regarding buying bonds funds or bond ETF's. If interest rates increase as they are expected to do in near future, bond fund unit values will drop. They will eventually recover with the shorter duration funds recovering before the long duration funds. You might consider buying 2-5 yr bonds directly from BMO Investorline or even GIC's so that your capital will be locked in. (BTW, I can't see any reason to buy PH&N Bond fund over the TR fund)
With just $100k, you may want to go the MF route to get diversification, but the MER's will likely be a drag on the performance.
Remember, I am just another investor - Have owned PH&N and deal through BMO - otherwise I know nothing