Comments on: A Sample RESP Portfolio http://www.canadiancapitalist.com/a-sample-resp-portfolio/ Helping you invest and prosper Sat, 11 Feb 2012 19:27:54 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Irina http://www.canadiancapitalist.com/a-sample-resp-portfolio/#comment-240963 Irina Mon, 09 Aug 2010 03:19:27 +0000 http://www.canadiancapitalist.com/2007/08/28/a-sample-resp-portfolio#comment-240963 I guess, I'm stuck... My account is converted now to e-funds and I bought my first investment. I bought it well before the cut-off time, but the price appeared on my statement was published on their web site only on the next day. At the moment of purchase the price seems to be "as of yesterday". So I'm basically buying a pig in a poke. Is there any way to know the price for the moment I'm making my purchase? I guess, I’m stuck… My account is converted now to e-funds and I bought my first investment. I bought it well before the cut-off time, but the price appeared on my statement was published on their web site only on the next day. At the moment of purchase the price seems to be “as of yesterday”. So I’m basically buying a pig in a poke. Is there any way to know the price for the moment I’m making my purchase?

]]> By: Canadian Capitalist http://www.canadiancapitalist.com/a-sample-resp-portfolio/#comment-234428 Canadian Capitalist Mon, 19 Jul 2010 19:57:45 +0000 http://www.canadiancapitalist.com/2007/08/28/a-sample-resp-portfolio#comment-234428 @Irina: The money market fund invests in short-term instruments. As you know, we are in a low interest rate environment with T-bills paying just 0.54%. After paying a 0.75% management fee, your return will be negative. But banks like to keep the value of the money market fund stable. So, money market funds have been temporarily reducing their management fees. That's why you see the MER to be less than management fees. The total return of the fund before expenses in 2009 turned out to be 0.93% (0.61% + 0.32%). It sounds about right. Money market funds are places where you temporarily park cash. They are not long-term investments. Since they have very little risk, their returns are also very low. @Irina: The money market fund invests in short-term instruments. As you know, we are in a low interest rate environment with T-bills paying just 0.54%. After paying a 0.75% management fee, your return will be negative. But banks like to keep the value of the money market fund stable. So, money market funds have been temporarily reducing their management fees. That’s why you see the MER to be less than management fees. The total return of the fund before expenses in 2009 turned out to be 0.93% (0.61% + 0.32%). It sounds about right.

Money market funds are places where you temporarily park cash. They are not long-term investments. Since they have very little risk, their returns are also very low.

]]> By: Irina http://www.canadiancapitalist.com/a-sample-resp-portfolio/#comment-234419 Irina Mon, 19 Jul 2010 18:49:02 +0000 http://www.canadiancapitalist.com/2007/08/28/a-sample-resp-portfolio#comment-234419 Canadian Capitalist, thank you for the reply! It's a bit more clear now, though it looks confusing in the "details" of the TD Canadian Money Market - I prospectus, that a bank rep. printed out for me: "Actual Fees: management - 0.75% MER - 0.61% " I also wonder... if this fund was not just a transition point, but the actual destination of my investment, why would somebody invest in a fund that has charges of 1.36% per year and its return for the 2009 was 0.32%? Ether I'm missing something or it's done for the hope of better return in the future... Canadian Capitalist, thank you for the reply! It’s a bit more clear now, though it looks confusing in the “details” of the TD Canadian Money Market – I prospectus, that a bank rep. printed out for me:

“Actual Fees:
management – 0.75%
MER – 0.61% ”

I also wonder… if this fund was not just a transition point, but the actual destination of my investment, why would somebody invest in a fund that has charges of 1.36% per year and its return for the 2009 was 0.32%? Ether I’m missing something or it’s done for the hope of better return in the future…

]]> By: Canadian Capitalist http://www.canadiancapitalist.com/a-sample-resp-portfolio/#comment-234399 Canadian Capitalist Mon, 19 Jul 2010 15:59:32 +0000 http://www.canadiancapitalist.com/2007/08/28/a-sample-resp-portfolio#comment-234399 @Irina: MER = Management fees + operating expenses. Management fees are charged daily on the assets of the fund. So, if the management fee is 1% and there are 365 days, the fund charges a fee of 1/365% everyday. These fees are charged directly to the asset base, not separately to the unit holder. Let's say the MER of your fund is 1.5%. If you invest $500 for one week, you'll be indirectly charged a fee of 1.5% / 365 * 7 * $500 = $0.14. @Irina: MER = Management fees + operating expenses. Management fees are charged daily on the assets of the fund. So, if the management fee is 1% and there are 365 days, the fund charges a fee of 1/365% everyday. These fees are charged directly to the asset base, not separately to the unit holder.

Let’s say the MER of your fund is 1.5%. If you invest $500 for one week, you’ll be indirectly charged a fee of 1.5% / 365 * 7 * $500 = $0.14.

]]> By: Irina http://www.canadiancapitalist.com/a-sample-resp-portfolio/#comment-234391 Irina Mon, 19 Jul 2010 15:11:50 +0000 http://www.canadiancapitalist.com/2007/08/28/a-sample-resp-portfolio#comment-234391 I just opened a Mutual funds RESP and planing to convert it to e-fund asap. I noticed that Money Market Fund (the default one) has MER AND management fee. I know it's gonna be only a transition point, but money are still going to sit in it for some time. Can anyone who is using this scheme tell me what it cost in real $$ to have your money in it? Per day, per month? I mean, for instance, if for some reasons my contributions of $500 will be parked there for a week, how much do they charge and when? Thanks. I just opened a Mutual funds RESP and planing to convert it to e-fund asap. I noticed that Money Market Fund (the default one) has MER AND management fee. I know it’s gonna be only a transition point, but money are still going to sit in it for some time. Can anyone who is using this scheme tell me what it cost in real $$ to have your money in it? Per day, per month? I mean, for instance, if for some reasons my contributions of $500 will be parked there for a week, how much do they charge and when?

Thanks.

]]> By: Jason http://www.canadiancapitalist.com/a-sample-resp-portfolio/#comment-228061 Jason Wed, 23 Jun 2010 13:08:13 +0000 http://www.canadiancapitalist.com/2007/08/28/a-sample-resp-portfolio#comment-228061 Hi everyone, My boys are now 12 and 14. What is a recommended RESP asset allocation for their ages? Example: If my boys were young, as per the posted article I would place their funds in 80% equities and 20% bonds (20% bonds, 20% Canadian equities, 30% US equities and 30% developed market equities). As they get older I'm assuming I should decrease the equities allocation and increase the bonds allocation. But....to what level? Thanks....Jason Hi everyone,

My boys are now 12 and 14. What is a recommended RESP asset allocation for their ages? Example: If my boys were young, as per the posted article I would place their funds in 80% equities and 20% bonds (20% bonds, 20% Canadian equities, 30% US equities and 30% developed market equities).

As they get older I’m assuming I should decrease the equities allocation and increase the bonds allocation. But….to what level?

Thanks….Jason

]]> By: Corinne http://www.canadiancapitalist.com/a-sample-resp-portfolio/#comment-218931 Corinne Sat, 08 May 2010 01:40:46 +0000 http://www.canadiancapitalist.com/2007/08/28/a-sample-resp-portfolio#comment-218931 If I make a withdrawal from my family plan for my daughter's education, can I still contribute the following year for my son's and receive the CESG? Both names are on the RESP. If I make a withdrawal from my family plan for my daughter’s education, can I still contribute the following year for my son’s and receive the CESG? Both names are on the RESP.

]]> By: Bob http://www.canadiancapitalist.com/a-sample-resp-portfolio/#comment-210711 Bob Wed, 10 Feb 2010 19:58:51 +0000 http://www.canadiancapitalist.com/2007/08/28/a-sample-resp-portfolio#comment-210711 Hey Dave - I've had an e-series for a over a year now. It's true you can only buy index funds from the Money Market within your RESP but they can link the money market to any bank account you want. I transfer money from a chequing account at another institution - money is usually there within 24 hours, then I buy my e-series index funds from that. The matching money from the government also gets deposited in that account for you to use as you wish. I'm assuming if you set up monthly transfers and then set up monthly purchases of the e-series maybe 48 hours later it would all be fine (and still be very "e"). The start-up of the RESP is still paper based though (but I found the TD person very helpful and she did most of it for me). Hope this helps, Bob Hey Dave – I’ve had an e-series for a over a year now. It’s true you can only buy index funds from the Money Market within your RESP but they can link the money market to any bank account you want. I transfer money from a chequing account at another institution – money is usually there within 24 hours, then I buy my e-series index funds from that. The matching money from the government also gets deposited in that account for you to use as you wish. I’m assuming if you set up monthly transfers and then set up monthly purchases of the e-series maybe 48 hours later it would all be fine (and still be very “e”). The start-up of the RESP is still paper based though (but I found the TD person very helpful and she did most of it for me).
Hope this helps,
Bob

]]> By: David Hayes http://www.canadiancapitalist.com/a-sample-resp-portfolio/#comment-209572 David Hayes Tue, 26 Jan 2010 21:40:04 +0000 http://www.canadiancapitalist.com/2007/08/28/a-sample-resp-portfolio#comment-209572 How are you finding the convienience of the eFunds? I'm looking at the same solution for a low fee RESP. The TD Person I spoke to today said I could only make lump sum contributions in the branch via a Money Market Fund (this doesn't sound very "e"). How does it work for monthly payments? Thanks Dave How are you finding the convienience of the eFunds? I’m looking at the same solution for a low fee RESP. The TD Person I spoke to today said I could only make lump sum contributions in the branch via a Money Market Fund (this doesn’t sound very “e”). How does it work for monthly payments?
Thanks
Dave

]]> By: Portfolio Size for Choosing ETFs over Index Funds | Canadian Capitalist http://www.canadiancapitalist.com/a-sample-resp-portfolio/#comment-191388 Portfolio Size for Choosing ETFs over Index Funds | Canadian Capitalist Wed, 13 May 2009 20:23:21 +0000 http://www.canadiancapitalist.com/2007/08/28/a-sample-resp-portfolio#comment-191388 [...] of iShares CDN LargeCap 60 Index Fund (TSX: XIU) but you can buy index mutual funds such as the TD e-Series funds for as little as $100 (or even $25 for pre-authorized purchase [...] [...] of iShares CDN LargeCap 60 Index Fund (TSX: XIU) but you can buy index mutual funds such as the TD e-Series funds for as little as $100 (or even $25 for pre-authorized purchase [...]

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