Mutual funds Канада
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Mutual Funds Canada — Mutual Funds — Canada Mutual Funds
Mutual Funds Canada all about mutual funds in Canada. Mutual Fund news, information, data and daily navps including top 10 funds in each category, asset class and sector. Mutual Funds, fund facts, insight and analysis of all Canadian mutual funds.. The «Mutual Fund» and a new history of Mutual Funds in Canada Mutual Funds in Canada have become the.
How Mutual Funds Work
A mutual fund is a collection of investments, such as stocks, bonds and other funds owned by a group of investors and managed by a professional money manager. The investment objective of the mutual fund determines what types of securities it buys. A mutual fund can focus on specific types of investments. For example, a fund may invest
Mainly in government bonds, stocks from large companies, or stocks from certain countries. Or, it may invest in a variety of investments. When you buy a mutual fund, you’re pooling your money along with other investors. You put money into a mutual fund by buying units or shares of the fund. As more people invest, the fund issues new units or shares.
The investments in a mutual fund are managed by a portfolio manager. They manage the fund on a day-to-day basis, deciding when to buy and sell investments according to the investment objectives of the fund.
4 things to know
The level of risk and return depends on what the fund invests in. Mutual funds are not guaranteed or insured by the Canada Deposit Insurance Corporation (CDIC) or any other government agency – even if you buy through a bank and the fund carries the bank’s name. You can lose money investing in mutual funds.
How a fund has performed in the past can’t tell you how it will perform in the future. But past performance can help you determine how volatile or risky the fund’s returns may be.
3.Price to buy and sell
You buy mutual funds at the fund’s net asset value (NAV) plus any sales charges. Mutual funds are redeemable – you can sell your mutual funds at the current NAV less any fees and charges for redemption.
All mutual funds have fees and expenses that are collected my firm which will reduce your investment return
Net asset value (NAV)
When you purchase or redeem securities of a mutual fund, you pay or receive what is known as the net asset value (NAV) of the security at the time of purchase, switch or redemption.
Most mutual funds report their NAV daily in the business section of many newspapers, or on the fund manager’s website. NAV represents the mutual fund’s assets less its liabilities. NAV will fluctuate with changes in the market value of the mutual fund’s particular investments.
2 ways to make money on a mutual fund
If you sell your mutual fund for more than you paid for it, you will have a capital gain. If you sell your mutual fund for less than you paid for it, you will have a capital loss.
Depending on the type of fund you buy, you may also receive distributions of dividends, interest, capital gains or other income the fund earns on its investments.
You can choose to receive distributions in cash or have them reinvested in the fund for you. Unless you ask for the distributions to be paid in cash, the mutual fund will usually reinvest the distributions for you.
Fees and expenses reduce the return you get on your investment. Some of these fees are paid by you, and others are paid by the fund. Understand the costs before you buy a mutual fund.
How mutual funds are taxed
If you hold your mutual funds in a non-registered account, any money you make on them is subject to tax. Distributions are taxable in the year you receive them,
whether you get them in cash or they are reinvested for you. Interest, dividends and capital gains are all treated differently for tax purposes, and that will affect your return from an investment.
If you hold your mutual funds in a registered plan, like an RRSP, an RRIF or an RESP, you won’t pay tax on the money you make as long as that money stays in the plan.
When money is withdrawn from the plan, it will be taxed as income. With a TFSA, you don’t pay any tax on the money you make while it’s in the plan – or when you take it out.
Where to buy mutual funds
- Banks and trust companies
- Life insurance companies
- Credit unions and Caisses Populaires
- Mutual fund dealers
- Investment Firms
- Mutual fund companies that sell directly to the public.
Most mutual funds are sold through financial advisors who are required to be registered with their provincial regulator (for example, the Alberta Securities Commission). They must also work for a company that is registered to sell funds. You can buy mutual funds without an advisor if you use a discount brokerage.
Financial advisors who sell mutual funds are required to be registered with their provincial securities regulator Check registration and background through Canadian Securities Administrators.
Mutual funds are not guaranteed. You may not get back the amount of money you invest.
HSBC Wealth Compass ™️ Funds
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HSBC Mutual Funds 1
Get HSBC’s global expertise working for you.
- Investor Series – Start your mutual fund portfolio with a $500 initial investment, or with a regular savings plan of $25/month.
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- Advisor Series – Access HSBC Mutual Funds through your Investment Advisor with a $500 initial investment.
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HSBC World Selection ®
Diversified Funds 2
Add global diversity to your portfolio with World Selection ® Diversified Funds.
- Start investing with as little as $25/month
- Monitor your portfolio’s performance 24/7 through Personal Internet Banking (certain accounts apply)
- Evaluate your overall investment status with quarterly statements from your managed investment account
HSBC World Selection ® Portfolio 2
Invest with HSBC World Selection ® Portfolio today.
- Minimum initial investment: $50,000
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Important investment information
Mutual Fund ratings and reports
HSBC Mutual Fund daily unit prices
Investment Insights Centre
1 HSBC Global Asset Management (Canada) Limited (“AMCA”) is the manager and primary investment advisor for the HSBC Mutual Funds. HSBC Investment Funds (Canada) Inc. («HIFC») is the principal distributor of the HSBC Mutual Funds. HSBC Mutual Funds are also distributed through authorized dealers. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus, Fund Facts, and other disclosure documents before investing. Mutual funds are not guaranteed or covered by the Canada Deposit Insurance Corporation, HSBC Bank Canada, or any other deposit insurer or financial institution. The net asset values of all mutual funds, including the HSBC Mutual Funds, may change frequently and any past performance may not be repeated. For money market funds, there can be no assurances that such funds will be able to maintain its net asset value per security at a constant amount or that the full amount of your investment in the fund will be returned to you.
2 HSBC World Selection® Portfolio is a portfolio investment service offered by HIFC. In this service, a client’s assets are invested in model portfolios. Each model portfolio is comprised of investments in HSBC Pooled Funds, which are mutual funds managed by AMCA and distributed by HIFC. AMCA provides discretionary investment management services to the portfolios in the HSBC World Selection Portfolio service. Commissions, trailing commissions, management fees, investment management fees and expenses all may be associated with investments in the HSBC Pooled Funds and/or the HSBC World Selection Portfolio service. Please read the applicable account opening documentation and HSBC Fund Facts before applying for the HSBC World Selection Portfolio service. The HSBC World Selection Portfolio service and the HSBC Pooled Funds are not guaranteed or covered by the Canada Deposit Insurance Corporation, HSBC Bank Canada, or any other deposit insurer. The value of mutual funds may change frequently and past performance may not be repeated. The unit value of money market funds may not remain constant.
All products and services of HIFC and AMCA are only available for sale to residents of Canada, unless the laws of a foreign jurisdiction permit sales to its residents. Please contact your HSBC Mutual Fund Advisor for more details. The contents of this site should not be considered an offer to sell or a solicitation to buy products or services to any person in a jurisdiction where such offer or solicitation is considered unlawful.
HIFC is a direct subsidiary of AMCA and an indirect subsidiary of HSBC Bank Canada, and provides its services in all provinces of Canada except Prince Edward Island. AMCA is a wholly owned subsidiary of, but separate entity from, HSBC Bank Canada and provides its services in all provinces of Canada except Prince Edward Island.
®World Selection is a registered trademark of HSBC Group Management Services Limited.
HSBC Wealth Compass™ is a trademark of HSBC Group Management Services Limited.
|Article by||R.M. Korkie|
|Published Online||February 7, 2006|
|Last Edited||March 4, 2015|
An investment company may have many different mutual funds, each fund possessing different objectives and asset classes. The objectives, trading activity and asset classes of mutual funds vary widely but must be clearly stated to the investing public in a fund’s prospectus.
An investment company may have many different mutual funds, each fund possessing different objectives and asset classes. The objectives, trading activity and asset classes of mutual funds vary widely but must be clearly stated to the investing public in a fund’s prospectus. Funds may specialize in specific or mixed asset classes, thereby facilitating a large choice of investment funds. Fund objectives and policies are generally stated in terms of a fund’s return and risk and include such terms as income, growth, balanced, active, passive, asset allocation, sector specialization, international, global, venture capital, high technology, commodities, small capitalization firms, labor-sponsored and index.
A mutual fund is a business incurring costs of operating, managing and marketing, and these costs are deducted from the proceeds received from the investors and/or the income generated by a fund’s assets. The income is distributed from the dividends, interest, coupons and capital gains received from a fund’s assets. However, a fund’s distributed income is not subjected to double taxation.
Mutual fund shares or units are purchased directly from the investment company or their agents. Each share entitles the owner to a proportionate share of the portfolio’s assets and their income less liabilities and expenses. On demand, a fund will buy from (redeem) and sell shares to the investing public, at a price equal to the net asset value per share of the fund plus any fees. This price will change daily as the prices of a fund’s assets change. In the case of money market funds, the price (typically $10) does not change because the fund’s income is continuously paid out in the form of additional units. A fund may charge a fee, called a load, which may be payable at the time of purchase (front-end load) or sale (back-end load); but most funds are no-load funds.
Each mutual fund has a board of directors or trustees overseeing the portfolio management activities that may be subcontracted to an investment advisory company and its portfolio managers. Mutual funds are subject to federal laws and provincial securities acts. Most funds are members of the Investment Funds Institute of Canada.
The recent large growth in the assets controlled by Canadian mutual funds reflects the investing public’s diversion of funds to this class of financial investment. Advantages of investing in mutual funds may include obtaining a diversified portfolio with little investment, avoiding trading commissions, enhanced investment liquidity and obtaining professional portfolio management services. Disadvantages may include receiving a relatively low return due to a fund’s large expense ratio, incurring a relatively large risk due to excessive fund turnover and loss of control in choosing specific assets.
Canadians: Ditch Your Mutual Funds and Your Mutual Fund Stocks
Nelson Smith | September 8, 2015 | More on: AGF.B CIX IGM XIC
Much to the chagrin of us here at Motley Fool Canada, the majority of Canadians continue to plough their hard-earned wealth into expensive mutual funds.
The average fund in Canada has an annual management fee of approximately 2.5%, a number that looks pretty reasonable on the surface. But in reality it’s a huge bite of an investor’s wealth each year. With the stock market only expected to return in the neighborhood of 8-9% annually, taking away 2.5% each year is a pretty serious handicap.
Look at it this way. If you invested $50,000 at a 9% return, you’d end up with a pretty impressive nest egg of $663,383 at the end of 30 years, assuming no taxes or other fees. If we ratchet the return expectations down 2.5% to 6.5% annually, the same $50,000 original investment grows to just $330,718.
I don’t know about you, but I certainly can’t afford to lose $330,000 over the course of my investing career. That’s the difference between a comfortable retirement and one where someone is constantly pinching every penny.
Plus, it’s not like alternatives don’t exist. Canadians looking for information about individual stocks can easily find what they’re looking for, and learning how to invest is a skill I’m convinced anyone can master if they dedicate some time to it. And if not, exchange traded funds (ETFs) offer all the diversification that a mutual fund boasts with a management fee that’s only a fraction of what mutual funds charge.
Investors can buy an ETF that tracks the TSX Composite Index for a management fee of 0.05% per year. To put that into context, that’s 98% less than the typical mutual fund fee of 2.5%. It’s pretty obvious that mutual fund investors would be better off in a low-cost ETF like the iShares S&P TSX Capped Cmpst Indx Fnd (TSX:XIC).
In 2020 the number of Canadians invested in mutual funds could head sharply lower. Legislation has been passed that will force mutual fund companies to disclose to investors what their mutual funds will cost to own in dollar terms, not just percentage terms. Suddenly, investors will be hit with the reality that a 2.5% fee on $100,000 in assets is $2,500 per year.
How will this affect Canada’s fund companies?
Why I’m bearish on mutual fund providers
When I think of mutual fund companies in Canada, three immediately come to mind: IGM Financial Inc. (TSX:IGM), AGF Management Limited (TSX:AGF.B), and CI Financial Corp. (TSX:CIX).
IGM Financial is best known for its Investors Group subsidiary, an army of some 5,000 investment advisors with offices located from coast to coast. Investors Group reps tend to make a pretty good living on recommending products like insurance, mortgages, and, of course, expensive mutual funds.
Investors are well aware this new legislation could cut into IGM’s bottom line, and have responded by sending the stock much lower. At the current price of less than $35 per share, IGM trades at just 11.4 times earnings and boasts a dividend yield of 6.4%. And that’s before the disclosure changes become mandatory.
The basis of IGM’s whole business model rests on providing investors with expensive funds. Once investors start avoiding mutual funds en masse, who knows what it’ll do to IGM’s bottom line.
Perhaps AGF is an even more precarious spot though. AGF doesn’t have an army of sales reps to push its products; rather, it’s forced to use independent mutual fund agents as a way to sell its funds. That’s a tough go even when the market is good. It’ll be even tougher in a future with better disclosure.
CI Financial is the star of the sector, but even it’s seeing some pretty serious weakness. Shares are currently at a 52-week low, and the dividend yield has been pushed up to 4.4%. Shares trade at 15.2 times earnings, which is the most expensive of the three peers. CI has also been hit recently with declining assets under management.
There may be a point where these stocks are attractive to value investors. But until we see just how the new disclosure rules will affect assets under management, I think investors should stay away from Canada’s mutual fund companies, whether through investing in their stocks or their expensive funds.
The better way to invest in wealth management. the banks!
It may sound funny after reading that article, but I’m bullish on money management in general. Just not through expensive funds. It’s obvious Canada’s largest banks will capture the lion’s share of that upcoming boom.
That’s not the only reason investors should load up on Canada’s banks. After all, they’re very stable, well capitalized, and face limited competition. That said, there are concerns for the banks and their investors. In this FREE report, we cover everything you need to know about Canada’s Big Five—whether you’re already an investor or are considering buying shares. Simply click here to receive your special FREE report, “What Every Bank Shareholder MUST Know.»
Fool contributor Nelson Smith has no position in any stocks mentioned.
Mutual funds Канада
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Canada’s Best Mutual Funds for 2014
Prior picks have out performed their peers for over a decade.
(Photograph by Raina + Wilson; Makeup and hair by Natalie Ventola / Plutino Group; Bike pump provided by Duke’s Cycle, Toronto)
Investing is like golfing. We know what to do when we swing. However, when emotions or distracting thoughts get in the way, we start hitting terrible shots. Picking good investment funds is similar. Most investors know what they should do: stick to funds with a steady, consistent track record and avoid those that assume excessive risk or charge high fees. Yet, emotions often get in the way, with all forms of distracting temptations. These include the deadly emotional mix of greed and fear.
That’s where the MoneySense Honour Rolls can help you sort the mutual fund wheat from the chaff. We choose the Honour Rolls based on an objective formula. It leaves no room for emotions or subjective bias. Our methodology is based on proven determinants of future performance, namely a mix of consistently superior results, low risk and low cost. Thanks to such rigid discipline, most Honour Roll funds (on average more than 70%) have out-performed the competition for nine years in a row.
The table on p. 44 depicts the percentage of above average performers from each year’s selection. We have followed the same selection methodology as last year, so disregard balanced and bond funds. For both categories, I remain skeptical about fund managers’ ability to beat the benchmark due to high fees, especially with fixed income paying so little. Therefore, I reiterate last year’s suggestion that you simply invest the fixed-income component of your portfolio in a cheap bond ETF. (See the ETF All-Stars for four bond ETFs.) But equity mutual funds can add value, so use the Honour Rolls to populate the equity component of your portfolio allocation.
This year’s winners
In the Canadian equity category, RBC Canadian Equity Income remains in the lead, after reporting another year of superior performance. The fund benefited from strong security selection in the energy and industrial sectors and from underweighting weak precious metals stocks. Based on recent distribution data, its estimated dividend yield, net of expenses, remains healthy, slightly exceeding 4% per annum.
Edgepoint Canadian portfolio is another solid performer with an acceptable risk profile. Here, historical results suggest a certain bias in favour of value stocks, both large and small cap. However, if you seek dividend income, this fund is not for you.
In the Canadian Small Cap category, our winners share common characteristics. These include a bias for value stocks, low portfolio turnover that adds to the cost advantage and no dividend income. BMO Enterprise Classic is a perennial Honour Rolls fund. It earned its top rank thanks to exceptional results the past year, posting a solid 48% one-year return as of Nov. 30, 2013. This was attributed to powerful sector allocation, as management smartly underweighted the weak materials sector and emphasized the strong technology and industrial sectors. Security selection helped.
Likewise, HSBC Small Cap Growth benefited from underweighting materials and avoiding precious metals. The fund delivered excellent results, extending an overall respectable track record.
In the U.S. Equity category, TD U.S. Quantitative has been a solid performer with acceptable bear market performance. The portfolio adviser attributes the success to the fund’s preference for small-cap issues. It follows an investing discipline that favours value stocks based on book value multiples, or companies with potential for earnings growth. My main quibble is its ultra-high portfolio turnover, reported at 350% to 400% during the years 2011 and 2012, which significantly adds to investment cost.
CI American Managers is an above average performer that doesn’t bet the farm on any one sector or stock. Its widely diversified portfolio and bias to value stocks contribute to a decent risk profile, with acceptable portfolio turnover just above 100%. Its five-year return is similar to the benchmark but the active portfolio management seems to have added value once you consider the reduced risk and ability to overcome the MER burden.
In the Global Equity category, Capital International has delivered superior returns each of the past three years. Its five-year return significantly exceeds the benchmark without assuming incremental risk, reflecting value added from active portfolio management. Its investment style is a blend of value and growth, with the advantage of low portfolio turnover averaging 20%.
Compass Maximum Growth Portfolio owes its seat on this year’s list to its long-term track record. It’s underperformed its peers of late, due to its high weighting of Canadian stocks. These underperformed global markets due to the weak resources sector. Still, it remains a solid choice and you should not be swayed by such short-term weakness.
Note: BMO Entreprise Fund Classic is no longer available to new investors.
Overall ratings in each category go from one circle (poor) to five circles (excellent). Any Honour Roll fund is a good buy, but some may be better than others. For instance if investing outside an RRSP, pay particular attention to “Tax Efficiency.” This measures how much of a fund’s return has been lost to taxes on distributions. (Funds that don’t distribute cash don’t lose anything, so are rated at 100%.) In general, the higher this number, the better for funds held in taxable accounts. All investors should also consider risk. “Risk-Adjusted Return” shows how much return each fund has achieved in proportion to its risk—again, the higher, the better. To play it safe, look for funds with a high “Consistency” rating (which shows the percentage of months in which a fund has performed better than its peers) and strong “Bear Market Performance” (the best funds get ‘A’s and so on down to ‘E’s).
Mutual funds allows you to put your money in one place, and still have access to a wide range of investments.
How to Apply
What are Mutual Funds?
A mutual fund is a portfolio of bonds, stocks, or other investable assets like money market products, that are selected and managed by a professional on behalf of many investors, like you. A mutual fund pools your money with other investors so that you can gain access to more underlying investments than you would normally have access to. With so many different types of mutual funds available, there may be one or more that fits your lifestyle and investment goals.
What are the benefits of a mutual fund?
A professional will decide the best mix of investments and will manage it all on behalf of the fund’s investors, so you don’t have the work or worry.
Broad range of investments
By investing in a number of different assets through a mutual fund, you’re minimizing your risk because your money is no longer dependent on the performance of a single investment.
Flexible mutual fund options
A Mutual Funds Representatives with TD Investment Services Inc. at TD Canada Trust can work with you to find the type of fund or portfolio of funds that fits you and your goals. And once you get started, you can automatically grow your investment with a Pre-Authorized Purchase Plan.
What does TD offer?
TD takes the work out of investing
TD provides a wide range of high-quality mutual funds for every kind of investor. From individual funds to portfolios of mutual funds – there is a solution to match your unique comfort level and investment goals. And because mutual funds are professionally managed, you can start investing without needing to be a financial expert.
What types of mutual funds are available?
Expand TD Mutual Funds
TD Mutual Funds are an easy way to start investing in a broad range of investment types, without the hassle of managing them.
- A Mutual Funds Representative with TD Investment Services Inc. at TD Canada Trust will help you find the mutual funds that are right for you
- Over 60 different industry-leading mutual funds to choose from
- Start investing with as little as $25 in a Pre-Authorized Purchase Plan
Expand TD Comfort Portfolios
A TD Comfort Portfolio is a collection of high-quality TD Mutual Funds. It’s a convenient all-in-one solution where your portfolio is professionally designed and maintained, so you can feel confident in your investment.
- Step-by-step support, from choosing the right portfolio to maintaining your investment
- Experts working for you day in and day out
- Plus, if the initial lump sum purchase minimum is met, you can make automatic contributions with a Pre-Authorized Purchase Plan
Expand TD Retirement Portfolios
Our TD Retirement Portfolios are carefully constructed investment funds built with retirees in mind. These all-in-one investments provide the potential for security, income, and growth and are intended to help you live your retirement the way you want.
- Low volatility stocks can reduce the risk of your investment
- Experts balance these funds in reaction to market changes regularly
Expand TD e-Series Funds
If you like to invest online – TD e-Series Funds are a great way to start investing. Because you buy online and receive all your statements online – the savings get passed on to you.
- MERs as low as 0.33%*
- Potential for higher returns with lower investment costs
- No additional set-up or commission fees
*As of December 31, 2012
TD Mutual Fund Accounts
TD Mutual Funds offers a full range of mutual fund account options — both non-registered and registered (TFSA, RESP, RSP). So, whether you are saving for a new home, your child’s education or your retirement you get professionally managed mutual funds to help grow your savings.
What types of mutual fund accounts are available?
Expand TD Mutual Funds Personal Non-Registered Account
Start investing without the hassle. With a TD Mutual Funds Personal Non-Registered Account, you can start saving for that special purchase.
- Start investing with as little as $25 in a Pre-Authorized Purchase Plan
- Convenient 24-hour access through EasyLine and EasyWeb
- Available as a personal or joint account
- No limits on how much you can deposit into your account
Expand TD Mutual Funds RSP Account
Make the most of your mutual fund investment by including it in your retirement savings plan (RSP).
- Your mutual fund grows on a tax-deferred basis
- Start investing with as little as $25 in a Pre-Authorized Purchase Plan
- Convenient 24-hour access through EasyLine and EasyWeb
Expand TD Mutual Funds TFSA
A Tax-Free Savings Account (TFSA) is a great place to purchase investments like mutual funds because you don’t pay any tax on the income you earn on your investment, and you don’t pay income tax on the amounts you withdraw.
- You don’t have to pay taxes on the investment earnings
- You can make withdrawals when you need them and not pay any tax
- Any amounts you withdraw can be put back in the following year
- You can choose a TD Comfort Portfolio for a convenient all-in-one investment solution
Expand TD Mutual Funds RESP
TD Mutual Funds are a great choice for RESPs because they help you save and plan for your child’s post-secondary education. Because you are spreading out your money across many bonds, stocks or other assets, you are helping to reduce the impact that dips in the market can have on your investment.
- Grows tax-free and there are no account fees
- The government makes contributions to the RESP through grant programs
- You can choose a TD Comfort Portfolio for a convenient all-in-one investment solution
- Start with as little as $25, and continue saving without even thinking about it with a Pre-Authorized Purchase Plan
Expand TD Mutual Funds Retirement Income Options
When it comes time to convert your RSP into a Retirement Income Fund, make your retirement money work hard for you on a tax-deferred basis by investing it in a mutual fund.
- Industry-leading mutual funds
- Lump sum withdrawals and transfers between funds can be made at any time for no charge
- 24-hour support with a Mutual Funds Representative through EasyLine
- Three different retirement income options are available depending on your situation and source of retirement savings:
- TD Mutual Funds Retirement Income Fund (RIF): Enjoy all the benefits of a mutual fund plus total flexibility of anytime withdrawals at no charge.
- TD Mutual Funds Life Income Fund (LIF): Strengthen your portfolio with a mutual fund and get complete control over how you receive your retirement income.
- TD Mutual Funds Locked-In Retirement Income Fund (LRIF): Grow your retirement savings without having to convert it to a life annuity at age 80.
Mutual funds 101
Whether you’re just considering investing or have already established a diversified portfolio, here’s some information about mutual funds you may find helpful.
Expand What is your investment risk tolerance?
One of the basic principals of investing is that the more money you want to make, the more risk you need to be willing to take. This is called the “risk/return trade-off”. What it means is that a mutual fund with a lot of growth potential is subject to the fluctuations in the market. So, someone with a high risk tolerance could stand to make or lose a lot of money, depending on the performance of their mutual fund investments.
The best way to understand the risk/return trade-off is to speak with a Mutual Funds Representative. They guide you through the Customer Investor Profile questionnaire that will help define your investing objectives and your tolerance to risk. Once they understand what you want from your mutual fund investments, they will be able to recommend a mutual fund or mutual fund portfolio that is suitable for your needs.
Expand What makes a portfolio low risk or high risk?
The amount of risk associated with an investment portfolio is determined by the types of assets held. Risk can also be associated with the growth potential of a portfolio.
Expand Why is a broad range of investments better?
Mutual funds spread your money out across many investment types. This investment strategy is called diversification.
Diversification helps you minimize your risk, because you aren’t putting all your eggs in one basket. You may also benefit from greater return potential.
So, with a mutual fund, your money is no longer dependent on the performance of a single investment, but instead is an average of the entire collection of investments. That way if one stock or bond – or other asset – in a mutual fund portfolio performs poorly, other well-performing holdings within the mutual fund’s portfolio, help offset any losses.
The same can be true when investing in more than one type of mutual fund to complete a well-balanced investment portfolio.
One of the best ways to diversify your portfolio is to invest among the three main asset classes:
Since asset classes tend to move independently of one another, positive performance in one asset class can help offset negative performance in another.
For mutual fund investors, a diversified portfolio would include a combination of money market funds for safety; bond and mortgage funds for income; and equity mutual funds for potential dividend income and long-term capital growth.
Expand Take advantage of global opportunities.
Another important way to diversify your portfolio is by investing in different countries around the world. Often, certain areas of the global economy are performing better than others. In addition, there are industries that may be better represented in other parts of the globe, then they are here at home. By spreading your investments throughout the world, you reduce your overall portfolio risk, while at the same time increasing your long-term growth potential.
Expand A long time horizon can reduce your risk.
Whether you are investing in a bond or equity, they are all subject to fluctuations in market value. Over longer periods of time, however, returns tend to average out and stabilize. Therefore, staying invested longer, helps to reduce your risk and improve your potential for higher returns.
Expand Benefit from dollar-cost averaging.
If you can contribute to your mutual fund on a regular basis, not only are you steadily growing your investment, you are saving money while doing so. If you set up a Pre-Authorized Purchase Plan you are investing a fixed amount to your fund at regular intervals.
This strategy, called dollar-cost averaging, lets you buy more units when prices are low and fewer units when prices are high. While it doesn’t guarantee a profit, or help protect you against a loss, it can result in a lower average unit cost over time.
For example, let’s say you have $60 a month to invest in a particular fund that fluctuates in price.
- January price = $5.00 – You buy 12 units
- February price = $3.00 – You buy 20 units
- March price = $6.00 – You buy 10 units
In three months, you have invested $180 and purchased 42 units, with an average cost per unit of only $4.29.
Best of all, when you set up a TD Comfort Portfolio, a Portfolio Manager does all the work for you. So all you have to do is set up a Pre-Authorized Purchase Plan and enjoy the savings.
In order to set up a Pre-Authorized Purchase Plan, you must meet a $2,000 initial purchase minimum.
Costs and benefits
The value of professional investment management
When you’re ready to move beyond savings accounts and Guaranteed Investment Certificates (GICs), mutual funds can offer an easy way to tap into potentially greater returns and help you reach your longer-term savings goals, such as retirement. TD offers solutions for every investor type, whether you’re seeking security, income, growth or a balance of all three. And it takes only $100 to get started.
Expand What does it cost to invest?
Mutual fund costs are typically expressed as a Management Expense Ratio, or MER. The fund costs that make up the MER are not charged to investors directly. Rather, the MER is reflected in the net return of a fund.
MERs vary, depending on the type of fund and how actively managed it is. For example, index funds generally have very low MERs. That’s because they are passively managed — the fund manager simply matches a market index.
With actively managed funds, however, the fund manager buys and sells securities, seeking to outperform the index. Backed by a team of researchers and analysts, fund managers stay on top of market opportunities, looking for ways to maximize returns while mitigating risk and making investment decisions on behalf of all fund investors.
Expand The value behind the MER
Most of the fees you pay are used to cover the cost of managing the fund. When you choose TD Mutual Funds, expertise is built right in to every fund. You get:
- Professional fund management. TD Mutual Funds are managed by TD Asset Management Inc., (TDAM), one of Canada’s largest fund managers.
- A w >
The management fee has two parts:
Portfolio management fees, pa >You can benefit from:
Research, investment selection and professional management.
Trailing commissions, pa >You can benefit from:
Ongoing customer care, including advice and service. For more on trailing commissions, see below.
- Cover accounting, audit costs and record keeping.
Taxes — GST and QST or HST
Expand What are trailing commissions and how do they work?
Trailing commissions are paid by the investment management firm (for TD Mutual Funds, this is TD Asset Management Inc.) to the mutual fund dealer that you bought from (TD Investment Services Inc.). These commissions cover the cost of servicing your account and the advice provided by Mutual Funds Representatives in TD Canada Trust branches and at the call centre.
You can benefit from:
- Dealing with a licensed Mutual Funds Representative, who can explain your options and help you select the fund or funds that meet your current needs.
- The convenience of purchasing when and how you want.
- Confidence that your trades are being reviewed by a manager.
- Help, when you need it, in-branch, over the phone or online.
Expand Are there any sales charges or trading fees?
In addition to management fees, some — but not all — mutual funds charge sales commissions, or “loads.” Funds that don’t have these charges are called “no-load” funds.
Mutual funds that do charge them fall into two categories. You may need to pay a front-end load (charged when you purchase the fund) or a back-end load (charged when you redeem, or sell back, the fund to the company you bought it from).
When you purchase TD Mutual Funds through a Mutual Funds Representative at TD Canada Trust, there are no loads — 100% of your investment goes to work for you right away. However, because mutual funds are typically used for long-term investing, you may be charged a short-term trading fee if you switch or redeem a fund within 7 days of purchasing it (30 days for index funds).
Have a few questions?
We’ve provided answers to some of the most common questions people have about mutual funds.
Expand How do I begin investing in mutual funds?
The Six Steps to Building a Financial Plan is an effective way to get started on the road toward financial peace of mind.
Once you have a better idea of where you are now and where you want to be in the future, we recommend that you work with a TD Mutual Funds Representative to help ensure that the investments you choose provide the potential for growth, while at the same time keep your investment risk at a comfortable level.
The TD Mutual Funds Customer Investor Profile questionnaire helps you determine an asset mix that’s right for you. With the help of a Mutual Funds Representative, you can then invest in a TD Comfort Portfolio.
You’ll benefit from a diversified portfolio that reflects your personal investment needs and objectives.
Once you’ve created a personalized investment portfolio, you can conveniently access your account – as well as make account transactions – anywhere, anytime.
EasyWeb Internet Access is available 24 hours a day, seven days a week – free of charge. The cut-off time for online Mutual Funds transactions is 3 p.m. ET. Any transaction after this time will be processed as of the next valuation day.
EasyLine, a fully automated touchtone telephone service provided by TD Canada Trust, lets you access your investment accounts 24 hours a day, seven days a week simply by calling the EasyLine toll-free number at 1-866-222-3456.
Or simply visit any TD Canada Trust branch, where a Mutual Funds Representative with TD Investment Services Inc. can help you with all of your investment needs.
Expand Are mutual funds guaranteed?
Since mutual funds qualify as securities and not deposits, they are not guaranteed, their values change frequently and past performance may not be repeated.
However, fund managers and the funds themselves operate under strict securities regulations. For example, mutual funds are owned by the unitholders (people who own the mutual fund) and are separate legal entities from the companies that operate them. Securities legislation also requires that mutual fund assets be held in trust by a custodian on behalf of unitholders.
Expand What types of funds are available?
You can choose funds that invest in money market investments such as government issued treasury bills, income investments such as bonds, or equity investments such as stocks of corporations, both domestic and international.
Some funds are broadly diversified, while others target an asset class or a specific sector of the economy, such as international bonds or science and technology stocks. Others aim to replicate the performance of a well-known index, such as the S&P/TSX Composite Index in Canada or Standard & Poor’s (S&P) 500 in the United States.
While there are hundreds of choices, each mutual fund will fall into one of the three main asset classes: safety, income or growth. Or, you can choose a balanced fund which is actively managed to maintain a mix of various asset classes.
Expand How much do I need to start?
The minimum initial investment for TD Mutual Funds is $100 for a non-registered account and $100 for an RSP account. The minimum subsequent investment is $100 for both types of accounts.
A TD Mutual Funds Pre-Authorized Purchase Plan is a convenient and affordable way to build your savings. You can start with as little as $25 per fund per transaction and this amount can be automatically deducted from your bank account on a weekly, bi-weekly, semi-monthly, monthly, quarterly, semi-annual, or annual basis.
Transfers between TD Mutual Funds are free, however, a 2% early redemption fee is payable to all funds except money market funds if you transfer or sell units of these funds within 30 days (90 days for TD e-Series) of purchase. This fee is designed to protect unitholders from the costs associated with other investors moving quickly in and out of the Funds.
Frequent trading can hurt a fund’s performance by forcing the portfolio manager to keep more cash in the fund than would otherwise be needed or to sell investments at an inappropriate time. It may also increase a fund’s transaction costs.
Expand Where can I buy mutual funds?
Mutual funds are sold through registered Mutual Funds Representatives or other registered advisors with mutual fund or securities dealers associated with banks, trust companies and insurance companies in Canada.
At TD, you can purchase TD Mutual Funds through TD Investment Services Inc. by contacting a Mutual Funds Representative through EasyLine telephone services, EasyWeb Internet access or by visiting any any TD Canada Trust branch. You can also purchase TD Mutual Funds through TD Waterhouse Discount Brokerage, Financial Planning and Private Client Services.
Expand What about taxes?
Net income and net realized capital gains earned by a mutual fund are generally passed on to investors in the form of distributions. The frequency of distributions will vary depending on the mutual fund but will generally be monthly, quarterly or annually.
You can also earn a capital gain when you sell your mutual fund or switch from one mutual fund to another at a price higher than you paid.
The tax treatment of distributions received or capital gains realized will depend upon the type of account in which you hold the investment.
If you hold a mutual fund in a registered plan (such as an RSP, RIF, RESP or TFSA) distributions paid by a mutual fund and any capital gains realized are generally sheltered from tax. Any amount you withdraw from a registered plan (excluding a TFSA) is generally fully taxable. Amounts withdrawn from a TFSA are not taxable.
If you hold a mutual fund in a non-registered account, distributions paid by the mutual fund are taxable whether they are received in cash or reinvested into the mutual fund. You will receive a T3 Supplementary/Relevé 16 tax slip which will tell you the amount and type of income to report on your tax return. You must also include in your taxable income any capital gains realized from selling or switching your mutual fund. It’s up to you to calculate and report the capital gains you realize on your transactions. Although an official tax slip is not required, mutual fund companies are required to report all sales or switches to Canada Revenue Agency.
Expand What is the difference between book value and average cost per unit?
Book value is the original cost of purchases and reinvested distributions minus the average cost of any redemptions. Average cost per unit is used to calculate any capital gains or losses you may earn when you sell or transfer units of a fund you hold in a non-registered account. The average cost per unit is the book value of your fund divided by the number of units you hold.
Expand What is the difference between global and international funds?
Technically speaking, there’s a difference between a global fund and an international fund, from a North American perspective. A global fund may invest in all the markets of the world, including North America, whereas an international fund generally excludes North America.
Expand How do I compare different funds?
While past performance does not guarantee future growth, annualized returns for different periods (e.g. 1-year, 3-years, 5-years, 10 years) are often used to compare funds and the quality of their management. Most major daily newspapers publish mutual funds performance tables each month for periods ranging from one month to 10 years or more.
Comparing a fund with others in its peer group is a good way to evaluate past performance. Mutual fund tables make it easy by grouping similar funds together. The ability to consistently outperform its peers is one sign of a good-quality fund.
To make a fair comparison, it is important to recognize that all funds in one category are not the same. For example, some Canadian equity funds are managed conservatively, while others aggressively pursue growth. One fund manager may emphasize longer-term value, while another may actively trade investment positions at different times in the market cycle. If in doubt, find out from the fund company, the simplified prospectus or the fund facts sheet, what the fund’s investment objectives are and how the fund is managed. While some performance numbers can be very attractive, you may discover that the fund’s investments are too risky for you.
Expand How does TDAM discourage market timing?
While market timing is not illegal, our funds are designed for long-term mutual fund investors. TDAM started to charge an early redemption fee (ERF) for most TD Mutual Funds many years ago. This 2% fee is applied to investors that buy and sell units of the same fund within 30 or 90 days, thus discouraging for market timing. The amount charged by this process is paid to the fund to cover any costs or possible negative impact to the fund or its unitholders. In addition, we also retain the right to reject purchase orders from a unitholder who is conducting any activity considered detrimental to the funds or its unitholders.
At TD Mutual Funds we are committed to protecting the best interests of our unitholders. We strive to apply the highest standard of care and diligence, and we review our current policies and practices regularly to ensure they continue to protect you and the funds.
Canadian Mutual Funds
The Canadian mutual funds are highly popular among the potential investors across Canada.Like other nations,mutual funds of Canada pools money from different investors and then fund managers of the mutual fund issuers invest the amount in variety of securities like bonds,stocks,cash and other kinds of securities.
While selecting a Canadian mutual fund,it is prudent to have a clear overview about the personal investment objectives.Investment in mutual funds involve risk and before investing it is prudent to have a clear overview regarding the risks and benefits associated to investments in Canadian mutual funds.
Canadian mutual funds are in high demand ,Investment Funds Institute of Canada (IFIC) highlighted the fact that net industry sales was $2.5-billion in April 2007.It is five times more than the sales during the sales of April 2006. There are various financial advisory service providers and brokers in Canada who assist during purchase of Canadian mutual funds.
Number of investors are constantly at a rise and Canadian mutual funds can be categorized into two main categories :
- No-load funds: For many mutual funds,commission is not charged.
- Load funds:Commissions are charged for load funds.
The mutual fund investments in Canada is uphill as Canadian investors are shifting towards one-stop investment solutions. This is highly beneficial and convenient as client-risk profiling, regular re-balancing and monitoring the market pulse is carried on by experienced fund managers. IGM Financial is considered as the leading mutual fund firm of Canada.
The major mutual fund providers of Canada are mentioned below:
IGM Financial Inc.
Royal Bank of Canada
CI Fund Management Inc.
Canadian Imperial Bank of Commerce
Bank of Montreal
AGF Management Limited
Franklin Resources Inc.
Phillips Hager & North Ltd.
Bank of Nova Scotia
CMA Holdings Incorporated
National Bank of Canada
Fédération des caisses Desjardins du Québec
Manulife Financial Corporation
Industrial Alliance Insurance and Financial Services Inc.
Brandes Investment Partners
HSBC Holdings plc
Standard Life plc
Acuity Funds Ltd.
Saxon Financial Inc.
Ethical Funds Inc.
Mawer Investment Management Ltd.
Sentry Select Capital Corp.
Sceptre Investment Counsel Limited
Canadian mutual fund market offer a wide array of professionally managed portfolios and one can select according to personal financial objectives. Most of the Canadian mutual funds can be personally purchased. The net Asset Value(NAV) of strong Canadian mutual funds are growing daily and this attract a large number of Canadian investors