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Showing posts with label MorningStar Quicktake Report. Show all posts
Showing posts with label MorningStar Quicktake Report. Show all posts

Monday, February 25, 2008

Non RRSP investments and taxes

I find MorningStar very good to find any kind of information regarding mutual funds. As I previously post, I would like to invest a little 500$ in a mutual fund that still have a good return after taxes. I was than thinking of the CIBC Monthly Income Fund.

To find information, I consult the MorningStar Quicktake Report. Each Canadian mutual fund has one. I really enjoy Morningstar because their Web site exists in both French (yes!) and English. When I don’t understand something in English, I just switch for French… and vice versa… lol, since I do most of my financial reading in English.

I try to consult their articles as much as I can but one time, I invest in the RBC O’Shaughnessy International Equity Fund without doing any search. I didn’t do any because I told myself if it’s an O’Shaughnessy, it’s a good fund. And it’s happen that the author of the review of this fund in Morningstar, David O'Leary, believe that the management fees of the fund are too high, and as highlight at the beginning of the review “We are disappointed by this fund's higher fees.” And just to let you know, the same analyst in saying the following about my super RBC O'Shaughnessy All-Canadian Equity: “Don't let the recent dip in this fund's performance concern you.” I plan to keep that fund forever. I am all proud of that fund, even if my initial investment of 3 000$ drop down to near 1 000$. This fund is now close to new investors……

In date of today, I regret that choice because since I acquire that fund, I lost my initial investment, which was of 1 000$. In date of today, my 1 000$ now only worth 762.78$. So why should I pay higher fee if the fund is not doing well? I believe O’Shaughnessy magic trick to invest might only work well in countries were the economy is in good shape. From what I notice, International funds don’t have a very good return since inspection, Canadian mutual funds are way better. I would like to invest in Canadian mutual funds only, but I understand it’s important to diversify a bit my portfolio. That’s also the reason why I also invest more than 2 000$ in the RBC U.S. Mid-Cap Equity Fund C$, a US funds. I don’t really like to invest outside Canada, because I believe the best funds are here.

What I dislike about RBC is that they ask too much for non RRSP investment. They ask for a minimum of 1 000$ for non RRSP investment. Compare to TD who just ask a cute little tiny 100$, the difference is huge. And CIBC only ask for minimum of 500$ for non RRSP investment. So why should I stick to RBC? The only reason why I begin buying funds at the RBC is because of the O’Shaughnessy mutual funds.

While I was doing some search in the Morningstar Web site, I was quite surprise to find out that a mutual fund I previously invest in, the RBC Global Resources fund, was quote five stars for after taxes value. I have a good return after taxes for that fund and I didn’t even know.
 

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