RRSP - Canadian - Making no money!

[CanadianMustache]

Hi All

My husband has just over $100,000 in his RRSPs. The money is divided in 4.

SCOTIA INNOVA BALANCED GROWTH PORTFOLIO  ($71,324.43)
SCOTIA RESOURCE FUND ($8,813.49)
SCOTIA CANADIAN DIVIDEND FUND ($14,357.93)
Scotia U.S. Opportunities Fund ($7,862.93)

My concern is that he's had about 100,000 in RRSPs since I met him 7 years ago. He lost quite a bit during the recession, but within a year it was all built back up. I am wondering why he isn't seeing much growth?

And also, is it possible, or advisable, to move it all to the dividend fund which has the lowest management fee (1.71%)?

I want to get this all organized because another $25,000 is being moved to his RRSPs in the next few weeks and I want to make sure his full amount is being maximized.

Thanks!!

[plainjane]

Have you taken a look at the Couch Potato?  http://canadiancouchpotato.com/model-portfolios/

Putting all your RRSP money into one fund and choosing that fund simply by MER seems short sighted.  What are your goals for this money?  How much risk are you willing to take? How long before you're going to need this money?

It looks like the "balanced growth portfolio" is actually just a grouping of other Scotia mutual funds that gives you a mix of Canadian (27%), foreign (33%) & bond funds (40%).

The Resource Fund is flagged as highly risky, and you're seeing that right now, because global production still hasn't really ramped back up again.

Canadian Dividend is 65% Canadian equity, 23% US equity.  It has a strong history if you look at that graph.  Going 100% here means you will be not have much buffer in terms of a cash/bond, and you'll be betting on Canada doing much better than the US & rest of the world.

US Opportunities is a very volatile graph, which makes sense at 91% US equities.

So, take a look at what the underlying premise of the funds are, and think about what you want your asset allocation to look like.  Also take MER into account, but if you're just chasing MER, you can do much better than 1.7%

[CanadianMustache]

Thanks PlainJane!

[Cecil]

One big problem is that he's paid more than $12,000 in fees in those 7 years ($100k * 1.7% * 7 years). That's a huge drain on his growth.

Look into Vanguard. They have index funds that are investor-owned, so they have very low expense ratios (less than 0.2% on most funds).

[CanadianMustache]

Thanks Cecil. I'll definitely look into vanguard

[grmagne]

Hi All

My husband has just over $100,000 in his RRSPs. The money is divided in 4.

SCOTIA INNOVA BALANCED GROWTH PORTFOLIO  ($71,324.43)

Hasn't his Scotia Innova Balanced Growth Portfolio been doing well during the past 5 years? According to the Morningstar fund rate of return, he should have been averaging 9.34% on this fund since the beginning of 2009.

http://quote.morningstar.ca/quicktakes/fund/f_ca.aspx?t=F000002J7N&region=can&culture=en-CA