A few weeks ago a leading Canadian financial journalist referred an investor who was looking for a second opinion (no charge for that, no obligation) on the composition of her portfolio:
Here is what I found:
Cash and Cash Equivalent (1%)
Fixed Income (28%):
4% Canadian Bond Index ETF (MER = .33)
4% Canadian Bond (Cdn Bank Managed) Fund (MER = .61)
7% World Bond (Cdn Bank Managed) Fund (MER = .80)
13% Canadian Preferred Share Index ETF (MER = .50)
Canadian Equity (31%)
12% Cdn Equity Index ETF (MER = .18)
5% Cdn Equity Dividend (Non-bank Managed) Fund (MER = .85)
5% Cdn Focused Equity (Non-bank Managed) Fund (MER = 1.33)
4% Cdn Small Cap Equity Index ETF (MER = .61)
4% Cdn REIT Index ETF (MER = .61)
1% Cdn junior Oil and Gas names (7 of 10 still have value)
US Equity (24%)
14% US Equity Index ETF (MER = .11)
5% US Equity Dividend (Non-bank Managed) Fund (MER = .85)
5% US Small Cap Equity Index ETF (MER = .37)
International Equity (17%)
11% Europe,Australia and the Far East Index ETF (MER = .51)
6% Emerging Markets ETF (MER = .82)
Advisor Fee = 1.25% annually.
MER (total portfolio) = .52%
Total cost = 1.77%
Last portfolio review : November 2014
Time to check in with your advisor:
Question 1) What am I getting for your 1.77% annual fee?
Question 2) Given my desire to retire in 12 years (it was 17 years when we started working together), is this risk profile (only 28% Fixed Income) adequate?
Question 3) Why so much exposure to Canadian Equity markets when Canada is only 4% of the global equity market?
Question 4) How much did you get paid to sell me those high risk and (for the most part) losing Junior Oil and Gas stocks that you were so excited about?
5) My total portfolio value is now back to the same level as it was in early 2013, what do you propose we do next?
I suggested that if she doesn't get the right answers, we would be more than happy to help!
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Scott Tomenson,CIM Managing Partner, Chief Investment Strategist