How To Setup and Rebalance TD e-Series Funds

One of the ways that you can create a simple, yet effective, investment portfolio is by investing in TD e-Series Funds. There is a bit of effort you need to put in to invest in TD e-Series Funds, but it is worth it.

Setup Your Investment Portfolio Using TD e-Series Funds

First of all, you need to apply using the form available on the TD Canada Trust website. The account application is pretty straightforward. You’ll need to provide information like your name, SIN, date of birth, and banking information.

The next couple pages are the Wealth Allocation Model and the Investor Profile. Fill out the Wealth Allocation Model to provide your Total Point Score. This score will show you which asset mix is most likely right for you. TD will review this information and help you identify the asset allocation to match your score.

How To Setup and Rebalance TD e-Series FundsIf you are aware of this process, it’s possible for you to adjust your score so that you can get the asset allocation that you feel is most likely to work for you. It requires a little thought and planning to adequately personalize your portfolio, but it’s worth the effort, to create the easy-to-manage portfolio you want.

The Portfolio Worksheet is where you enter the exact asset mix you want and the amount you are investing, both as a lump sum and pre-authorized purchase plan. To keep it really simple, many investors with a long enough investment time frame might benefit from a equal split into:

Once you have that all set up, you need to sign a simple Understanding & Consent form. In the Transaction Form you have to re-enter the information from the Portfolio Worksheet. These two asset mixes do need to match for you to complete your setup.

Once you finish, you need to mail it in to TD e-Series Funds Administration. The full address is on the first page of the pdf. Once everything is setup, TD will mail you your login information.

Rebalance Your Investment Portfolio

Even when you’re on an investment plan, your portfolio can begin to drift. Due to the way that funds are operated, and to market conditions, you might end up with more shares of one fund than another. This can bring your portfolio out of balance, and result in sub-par performance.

In order to get back on track, once a year you should rebalance your portfolio back to your original asset mix. Look at your portfolio, and determine your next course of action. If you have a certain amount of new money available to invest, put it into the under performing funds to bring them back up to 25% of your allocation. If you do not have enough new money to re-balance, you can sell some shares of the better performing funds and then put the proceeds into the others. Rebalancing this way forces you to buy low and sell high, which is the preferred strategy when you invest.

It’s also a good idea to rebalance as your goals and investing needs change. Eventually, you might want to rebalance so that you have a greater allocation of fixed-income assets. Create a reasonable investment plan that you can follow. Even with a simple portfolio composed of TD e-Series funds, it’s possible to change things up as you age and as you reach specific milestones. Just make sure that you rebalance according to a well-thought-out plan.

These steps will provide a diversified portfolio, investing in the entire index that the funds track. You can rebalance the portfolio yourself, avoid undue risk and stress, and you will pay a low Management Expense Ratio (MER) of less than 0.5%.

Written by Tom Drake

Tom Drake is the owner and head writer of Canadian Finance Blog. While you’re here, consider signing up for the RSS feed or email subscription. Both deliver the latest articles directly to you! You can also follow me on Twitter for all the latest posts or to send me any comments or questions!

12 Responses to How To Setup and Rebalance TD e-Series Funds

  1. shawn,

    iShares have lower MERs, but you have commission fees to pay to a broker since they are bought like stocks. The e-Series funds have slightly higher MER, but no cost to purchase.

    If your making small, automatic, bi-weekly or monthly purchases then you’ll likely be better off with the e-Series. If you’re looking to invest more money at once, then look into buying iShares.

  2. Tom,

    What are your thoughts on the tax advantages of ETF versus say these e-funds. I think the e-series funds are based on derivitives, which I really do not understand.


  3. shawn,

    I’m not positive, but I don’t think there is a difference tax-wise. They both hold the underlying stocks with minimal selling that would trigger capital gains. However, I’ve never seen a tax consequence personally as I have my e-Series funds in my RRSP.

  4. Hi Tom,

    I have E-series myself and I set it up to automatically deduct a certain amount (e.g. $200) per month from my savings account. I then split the $200 into the allocation according to my risk profile (e.g. $50 goes into Canadian Index and $25 to Bonds). That way, I don’t have to worry about rebalancing.

  5. I am absolute beginner who has 5K set aside to invest. Today I almost end up opening account with Questrade and than I found couple of articles similar to this one that gives advises to all beginners with small amount of money to invest in e Series. Any body who doesn’t share the same opinion and thinks that opening account with Questrade would be better or buying e Series would be best solution for me.

    • It’s a tough call now Jozo. A couple years ago I would have definitely said TD e-Series for the low cost, especially for monthly contributions.

      But recently Questrade stopped charging transaction fees to purchase ETFs. With the lower MERs on ETFs, they are looking like the better option now, and you can still do a similar simple portfolio to what I have in the post above.

  6. Tom thank you very much for your advise. Although there is no transaction fees with Questrade I think it would be safer for me to go with TD e Series. After reading many different articles and blogs people mostly agree that with smaller amount money its better to start with e Series. Eventually when you gain more knowledge and have more money available to invest you may open account with lets say Questrade and start trading independently.
    I know that with all your experience it is easy for you to say that I can set up similar portfolio to what you have posted in your article, for me it means that I should read many more articles maybe some book as well to be sure what exact ETFs to choose to make similar portfolio without dreading after I buy them.
    I would appreciate and I hope is not to much if I ask you to specify some ETFs that would make similar portfolio to one from text above.

  7. I’m trying to choose between TD e-series or Questrade ETFs for an RESP.

    I’ll be investing $10K to start and then $250 per month going forward.

    How often do you think I will end up selling to rebalance?

    Would TD e-series or Questrade ETFs have lower overall fees? Thank you.

  8. Hi Tom,

    Regarding the re-balancing of the e-series portfolio, I have lost track in last year or so. How can I bring it back to what it originally was? Mine was 40 bonds, and 20 CDN, US and Int’l equities. Your expert advise would be much appreciated.


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