Author Topic: Managed DSC mutual funds - more than face punches needed  (Read 1170 times)

Heckler

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Managed DSC mutual funds - more than face punches needed
« on: December 26, 2014, 10:26:53 AM »
I'm well on my way to a balanced, low cost indexed buy and hold portfolio with VAB, VUN, VCN, building it with biweekly contributions to my work RSP with Sunlife index funds and transferring annually to Vanguard through BMO Investorline.

However, my wife still has ~28K in 2.7 MER, 6.0 DSC managed mutual funds that she's been buying for a long time before we had any investment knowledge.

She is able to move 10%/year from DSC to FEL, which effectively means the 6% sales charge disappears if she holds the funds for ten more years.

The good news is that our personal adviser has been moving the funds to the no sales fee FEL version and we've stopped contributing.  I'd love to move them all to a a Vanguard VCN and VUN, however, I am hesitant to sell and loose the 6%.

She has:

AIM1581 Trimark Canadian Equity, $16K
https://www.invesco.ca/publicPortal/portal/retail.portal?_nfpb=true&_nfxr=false&_pageLabel=fund_card_page_label&FundCardController_portlet_labelgroupId=1581&FundCardController_portlet_label_actionOverride=%2Fportlets%2Fproducts%2FmutualFunds%2FfundCard%2Ffundcard

AIM1561 Trimark Global Equity, $12K
https://www.invesco.ca/publicPortal/portal/retail.portal?_nfpb=true&_nfxr=false&_pageLabel=fund_card_page_label&FundCardController_portlet_labelgroupId=1561&FundCardController_portlet_label_actionOverride=%2Fportlets%2Fproducts%2FmutualFunds%2FfundCard%2Ffundcard


In addition to $22K of the FEL (no sales fee) versions of the same.


My brain tells me to hold the funds to eliminate the DSC. My gut says fire them, pay the 6% and get her on a path to FIRE.  We've always thought her fund "did pretty good", but we also never looked at them closely until now.

The enginerd in me needs to see actual data of cost vs returns compared during the same time period. The problem is her funds have been around for decades, but VUN and VCN are the latest and greatest here in the great white north.

Suggestions on how to do a fair, data based comparison of costs vs return?

CarFIRE

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Re: Managed DSC mutual funds - more than face punches needed
« Reply #1 on: December 26, 2014, 09:41:25 PM »
Fire them.  The performance is subpar.  How many years of better returns do you miss out on because of 6%.  The Total Market index outperformed Trimark over the period of their graph.  Trimark returned $67,300 on $10k invested in 1989.  The S&P500 Returned just over $80k.  I don't know the symbols of your funds or I would have graphed them in Morningstar.  Vanguard Health care fund would have returned over $400k!

The other fund as $46K vs $70.5K from 1992.  If you go to Morningstar you can graph over shorter or longer periods.   Try comparing to VTSAX(total stock Market) or a managed fund like VWIAX or POGRX.  By way of risk comparison look at VBTLX(Total Bond Market).  Then you can make an informed decision if taking the 6% haircut now is worth it.