Beware Toronto Dominion Asset Management “SmartFund” group of funds –MISSISSAUGAWATCH

August 11th, 2011  

UPDATE: Monday, August 15, 2011. At the suggestion of a friend, I have modified this blog editing it to focus on just one important point —BEWARE Toronto Dominion’s “FundSmart”!

With the TSX (340.91) and the DOW (423.37) recovering and many feeling a tad calmer, I want to alert people to a group of TD “FundSmart” mutual funds that your TD financial advisor would only be too happy to sell you.

First, “SmartFunds” are money-sucking dawgs.

Next, ALL of the holdings in these TD SmartFunds consist of other mutual funds. That is you’re dealing with a basket of funds within a fund. The news gets worse.  With these TD “SmartFunds”, you’re dealing with MER’s (management fees) ranging from 2.54 to 2.92.

That means, for example, in the TD SmartFund Managed Income Fund you are paying a management fee of 2.54% for a fund that has top holdings of 35.5% TD Canadian Bond Fund and 24% TD Short Term Bond Fund.

Well, the MER of the TD Canadian Bond Fund and TD Short Term Bond Fund are both 1.08%!

In just the TD SmartFund Managed Income Fund alone, the poor saps suckered with that dog are holding almost 60% of their “investment” in two TD Bond funds with MERs of 1.08% while they’re paying 2.54% for the privilege!

And sadly, there are plenty of people duped by these SmartFund funds. A quick bit of arithmetic shows about 2,480 million in assets spread through eight “Smart” funds.

Someone back on August 2001 would have been much better off to take (for example) $10,000 and invest the entire amount in the 1.08% MER TD Canadian Bond Fund than to sink it into the TD SmartFund Managed Income Fund hole.

$10,000 invested back then would now be worth only $13,731.51 with TD SmartFund Managed Income Fund versus $18,353.28 with the tame, low risk TD Canadian Bond fund! TD SmartFund Managed Income Fund sputtered up a mere 3.2% annual rate of return versus 6.3% when invested directly in their bond fund.

TD SmartFunds —it’s tough to get more felt up in your sleep than that.

Here. A graph right from their website:

TD SmartFund Managed Income Fund (green) versus TD Canadian
Bond (blue)  Timeline: August 2001 to current.

For an initial investment of  $10,000.00
Fund/Index Total Contribution Amounts Value as of 8/10/2011 Total Dollar Gain Fund’s % Return Annualized Equivalent Inception Date
TD Managed Income $0.00 $13,731.51 $3,731.51 37.3% 3.2% 11/12/1998
TD Canadian Bond $0.00 $18,353.28 $8,353.28 83.5% 6.3% 6/29/1988
The rate of return or mathematical table shown above is used only to illustrate the effects of the compound growth rate and is not intended to reflect future values of the fund or returns on investment in the fund.

What does TD Asset Management have to shovel about their TD SmartFund Managed Income Fund?

Recommended For

The Portfolio may be suitable for investors who: are seeking an increased exposure to international markets; prefer to have professional managers determine the selection and composition of their investments, as well as provide ongoing monitoring services; want mostly income combined with a moderate amount of capital growth; are willing to accept a low to moderate degree of risk; have a medium term investment time horizon.

and:

Why Invest

Constructed with an emphasis on fixed income over equities, the TD Managed Income Portfolio provides a balance between a moderate income stream, capital preservation and liquidity. The TD Managed Assets Program is a professionally constructed, managed and monitored solution, designed to moderate the effect of market volatility through multi-facet diversification.

And you want an even worse dog? A TD SmartFund with even higher management fees, that sinks like a stone when markets sour, and doesn’t fight its way back? The one our TD financial advisor stuck us in for two years until we smartened up?

TD FundSmart Managed Balanced Growth

If like us, you’d bought TD FundSmart Managed Balanced Growth in August 2001 —but unlike us, kept it, your $10,000 would now droop at $11,637.26, “annualized equivalent” of 1.5% return.

TD FundSmart Managed Balanced Growth’s 1.5% annual return since 2001 couldn’t even keep up with inflation, but the vile dog’s 2.82% management fees sure did all those years!

Someone else just keeping $10,000 in TD Money Market would even beat TD FundSmart Managed Balanced Growth with a snoozy $12,038.71. And with none of the angst during those gut-wrenching market plummets.

Observe.

TD FundSmart Managed Balanced Growth (green) versus TD Money
Market (blue)  Timeline: August 2001 to current.

Please note that the TD FundSmart Managed Balanced Growth was merged with the Canada Trust Mutual Fund equivalent on October 6, 2000 and incurred a share split.
For an initial investment of  $10,000.00
Fund/Index Total Contribution Amounts Value as of 8/10/2011 Total Dollar Gain Fund’s % Return Annualized Equivalent Inception Date
TD FundSmart Managed Balanced Growth $0.00 $11,637.26 $1,637.26 16.4% 1.5% 11/12/1998
TD Canadian Money Market $0.00 $12,038.71 $2,038.71 20.4% 1.9% 6/29/1988
The rate of return or mathematical table shown above is used only to illustrate the effects of the compound growth rate and is not intended to reflect future values of the fund or returns on investment in the fund.

What’s so despicable about these TD FundSmart funds is how they’re even named “Smart” to deceive —high management fees, dreg-shit performance… do they sound “smart” to you?

Please. For you own sakes, wake up.

 

MISSISSAUGAWATCH

One Response to “Beware Toronto Dominion Asset Management “SmartFund” group of funds –MISSISSAUGAWATCH”

  1. Anonymous Says:

    TD Asset Management mutal fund mamagers just take away your money from our view point… We held some TD mutal funds in our RRSPs and all they do is go down down down..


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