TD e-Series Funds may be the simplest way for someone to invest in a diversified portfolio with low Management Expense Ratios (MERs). Below are the four funds that you can use to build a rather complete portfolio and would work well for regular contributions into an RRSP or RESP.
TD Canadian Bond Index tracks the performance of the DEX Universe Bond Index. The Universe Index is comprised of Canadian investment-grade bonds which mature in more than one year. It has a MER of 0.48%.
TD Canadian Index tracks the performance of the S&P/TSX Composite Total Return Index. The S&P/TSX Composite Index is comprised of Canadian issuers traded on the Toronto Stock Exchange. It has a MER of 0.31%.
TD U.S. Index tracks the performance of The Standard & Poor’s 500 Total Return Index. The S&P 500 Index is comprised of 500 widely-held U.S. issuers. It has a MER of 0.33%.
TD International Index tracks the Morgan Stanley Capital International Europe, Australasia and Far East Index. The MSCI EAFE Index is a broadly diversified index consisting of equity securities of companies domiciled in developed markets outside the U.S. and Canada. It has a MER of 0.44%.
Not only do these four funds invest you in the entire index, their MERs are about 2% lower than the average mutual fund. This 2% advantage can go along way when investing over a long term.
Tomorrow’s post will detail some of the advantages that the TD e-Series Funds have over other mutual funds and show you how to open this type of account.
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Tom Drake is the owner and head writer of Canadian Finance Blog.
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Thanks for sharing such great investment funds, people who are investing for the first time for them this is the best post to read.
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Is it just me or is the TD e-series that tracks the U.S S&P 500 woefully inept? If you look at the vanguard VFINX which supposedly tracks the index in a similar fashion, the e-series seriously underperformed. Am I missing something?
I would really like an answer to his question. I’m about to open a TD brokerage discount account so I can invest some of my savings into TD e-series funds. However, this is the first time I hear something negative about these funds that I want to know more.
If you are comparing the TD US index in $CAD to the vanguard ETF in $US, then u get all the currency fluctuations tossed in. The TD US index-e currency neutral does a very good job of following the S&P500.
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[...] focused on putting some money aside, this is a good time to get it done. While I plan to setup a TD e-Series RESP, I recently found out that I’ll need to set up a GIC account as well in order to receive [...]
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Do TD e series mutual funds make sense for a taxable account? Or ETF’s a better choice?