29 Nov 2012 8 Comments
TD e-Series Portfolio
For those who are ready to go the Do-It-Yourself (DIY) investing route, but are still hesitant on how to start (or have been meaning to start all year and haven’t yet 
), I recommend starting up with the TD e-Series route.
If you are still deciding whether or not to move over from your current mutual funds, check out my 3-part series on mutual funds here! (I, II, III)
The TD e-Series funds are the cheapest index funds you will find in Canada. You can access your account online and there are no costs to set up the accounts, or any commission fees to purchase these funds. You will need $100 to buy a single fund, and if you sign up for their Pre-Authorized Purchase Plan (PAPP), you can automatically invest an additional $25 per fund on an annual basis if you want. You can also invest on a monthly basis as well! 
You can calculate your asset allocation in a variety of ways, but a very simple way would be to take your current age and use that as your bonds percentage, and take the remaining amount and split it evenly amongst the 3 equity types (Canadian, US and International).
So, say someone is finishing up school and starting to invest (nah, this isn’t targeted at anyone AT ALL! ) and they’re not sure where to start. Since they are pretty young and have a long investing time span, they can be more aggressive with their asset allocation. Therefore, their sample portfolio may look like this:
30% Canadian Equities – TDB 900
30% US Equities – TDB 902
30% International Equities – TDB 911
10% Canadian Bonds – TDB 909
For as little as $400 to start, and an additional $100 a month through their PAPP, they are on their way to a great portfolio! But their biggest advantage over us old fogies is that they have time, thus, the magic of compounding on their side.
The other recommendation I would have for this particular situation is that I would set up their accounts in a TFSA. Since they are just finishing up school, investing in a RRSP does not make sense as they will have tuition credit to use up as well. They will have $20K to fill up, and an additional $5,500 in contribution room will be added in 2013. This gives them enough contribution room to play with for a couple of years, and hopefully they will increase their monthly investment amounts as they start their full-time job!
Like I have mentioned before, I do not personally own any of the e-Series funds. If they choose to go ahead with the recommendation, I will follow-up with more information on what the process is like.
Thanks for reading.
Nov 29, 2012 @ 15:21:00
You don’t need the initial $100 per fund to get started, you can start from $0 and do a $25 PPP/SIP. One less excuse to get started!
Nov 30, 2012 @ 09:21:06
Hey B,
Really? That’s good to know; are you invested in the e-Series funds? That is definitely one BIG excuse that can no longer be used!
Thanks for dropping by!
Nov 30, 2012 @ 10:25:48
Yes, I started a TFSA this year at TD Waterhouse (better late than never!).
When I got my raise earlier this year, I opted for savings inflation instead of lifestyle inflation
The TFSA started at $0, and I add $50/month per fund through a SIP. If you want to do additional lump sum contributions, you still need to come up with at least $100 to deposit it into a fund. I use the same four e-Series funds you list above.
Nov 30, 2012 @ 11:41:44
Good for you! Now is the definitely the next best time to start investing. Do you use a similar allocation? Or asked another way, how did you determine your allocation?
Nov 30, 2012 @ 11:54:55
I did 25%/25%/25%/25%. Simple allocation, and basically my age in bonds (30+ish) with a little more tolerance for risk. My RRSP is still 100% equities…
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