Q: Good afternoon,
I've owned the MAW 108 & MAW 106 mutual funds in my RRSP and TFSA accounts for a number of years and although I've been reasonably pleased with the absolute return of each mutual fund, the relative annual return compared to their benchmark index has not been that great...
Given that the MER of both funds is substantially higher than that of an ETF tracking the S&P 500 and the S&P TSX, I'm thinking of selling both Mawer funds and replacing them with one ETF that tracks the S&P 500 and another that tracks the S&P TSX, both with a much lower MER.
Q1. Do you agree with this course of action given that there would be no tax issue in selling these Mawer mutual funds and replacing them with two appropriate ETFs.
Q2. Would you kindly recommend your two best ETF ideas that would achieve my goal of reducing my MER fees and that track the S&P 500 and S&P TSX indexes.
Thank you and as always, your sage advice is much appreciated.
I've owned the MAW 108 & MAW 106 mutual funds in my RRSP and TFSA accounts for a number of years and although I've been reasonably pleased with the absolute return of each mutual fund, the relative annual return compared to their benchmark index has not been that great...
Given that the MER of both funds is substantially higher than that of an ETF tracking the S&P 500 and the S&P TSX, I'm thinking of selling both Mawer funds and replacing them with one ETF that tracks the S&P 500 and another that tracks the S&P TSX, both with a much lower MER.
Q1. Do you agree with this course of action given that there would be no tax issue in selling these Mawer mutual funds and replacing them with two appropriate ETFs.
Q2. Would you kindly recommend your two best ETF ideas that would achieve my goal of reducing my MER fees and that track the S&P 500 and S&P TSX indexes.
Thank you and as always, your sage advice is much appreciated.
5i Research Answer:
Certainly, even with Mawer's lower-than-peers fees, there is still a fee drag on performance. We would be fine with the proposed move, and would suggest VFV and XIC for the S&P and TSX, respectively.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in VFV.