2012 Portfolio Re-balance Part 1: Where and Why

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One of my February goals was to re-balance my investment portfolio – mainly my RRSP and TFSA. I currently don’t have investment outside of these two vehicles. I have RRSP mutual funds and index funds in my ING account, my Manulife account and my TFSA is with TD Canada Trust. I want to have as few accounts as possible, and pay the least amount of fees.

Background on TD Canada Trust E-Series

I want to move most of my RRSP into my TD Canada Trust e-series self directed RRSP. The e-series are various index funds, so these funds are NOT actively managed, and they have one of the lowest MERs on the market. For instance, a Canadian index fund has an MER of 0.3% and the global index fund has an MER of 0.5%.

Getting a TD Canada Trust e-series account set up is like pulling teeth, but worth the effort for the low fee’s, IMHO. For come great how-to’s, check out step-by-step instructions from Krystal and Young and Thrifty, I followed their instructions, and 3 weeks and a rejected copy of void cheque (you must use an original cheque – the ING void cheques do not work), I finally got a confirmation from TD my e-series account was up and running. Hallelujah!

Where and Why – ING

I have some of my RRSPs in ING Streetwise account which I started about 3 years ago when I first started getting into Personal Finance. It was easy and it was quick.

Three years later, my account sits at almost $17,000! :) However, even though ING Streetwise Mutual funds are mostly index funds – the only difference is in their asset allocations in bonds vs market indexes – they charge a 1% MER (high for a non-managed account).

I want to move out all my funds in my ING Streetwise RRSP Mutual funds into TD e-series self-directed RRSPs.

Where and Why – Manulife

I have most of my RRSP mutual funds with Manulife. My work has an employer RRSP matching program through Manulife. Since I can automatically contribute to my RRSP from my paycheque – I get the tax benefit right away, as I was too lazy to fill out the required form to lower my taxes. My account currently sits just above $23,000.

The lowest index fund MER charged my Manulife through the work plan is 0.7%, whereas I can get a similar e-series index fund for about 0.3 – 0.5% (half the fees!!). The only trick is that I must keep my employer match and the money I contributed to get the match, with Manulife for 10 years. In order to keep my employer match, I must wait 10 years, before I can take it out.

Frugirl’s Plan

Move the entirety of my ING Streetwise RRSP into my TD Canada Trust e-series self directly RRSP, and keep only the minimum in my Manulife account and transferring the remaining to TD Canada Trust e-series self directly RRSP.

In order to receive my tax benefits right away (I’d rather not wait for a return every year), then I need to fill out the required forms and send them in. I have this form printed out, I just need to set up my automatic contribution with TD Canada e-series so I have the necessary proof I need for the reduction in taxes.

Re-balancing my Portfolio with TD e-series funds

I had about $33,000 to re-balance from my ING and Manulife account into my TD e-series.

This was my first stab at re-balancing my portfolio. Since I am approaching 30, I decided to go with a slightly more conservative asset allocation: 30% bond and 70% stocks.

Do you see something that is missing? If you don’t see it, stay tuned for 2012 Portfolio Re-balance Part 2.

Hint: See my networth break down here
Cheers,

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6 Comments

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6 responses to “2012 Portfolio Re-balance Part 1: Where and Why

  1. That’s just about my allocation, and I’m 3 years younger than you. I didn’t bail when the markets went bonkers in 2008, so I figured that’s an asset allocation I can live with.

  2. Thanks for the mention! :) Great post- linked to it.

  3. Pingback: Weekend Ramblings & PF Blog Love: Overwhelmed Edition | youngandthrifty.ca

  4. I just came across your blog from Y&T and love it! I have a friend who is in the process of changing his investments from ING’s Streetwise funds to TD’s e-series funds, so it will be interesting to see his experience.

    I think you have a great asset allocation. My guess is TFSA? :)

  5. Pingback: 2012 Portfolio Re-balance Part 2: Forgetting about Cash | fabulously fru-girl

  6. PT

    You are mistaken if you think your holdings have the lowest MER’s in the market. There are several ETF’s that do the same thing with lower MERs – some almost 50% lower.

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