I am a big fan of TD e-Series Index Funds but if you already have an account with a discount broker other than TD Waterhouse, the Precision series index funds from Altamira would an acceptable, albeit slightly more expensive option. A couple of readers also mentioned that TD Mutual Funds are not ideal for RESP accounts that are eligible for the Canada Learning Bond (CLB) or the Canada Education Savings Grant (CESG) for low-income families.
The interesting index funds in the Precision series are:
- Precision Canadian Index Fund (AIS930) tracks the narrower S&P/TSX Index and would be equivalent to investing the iShares CDN LargeCap 60 Index Fund (XIU).
- Precision International Currency Neutral Index Fund (AIS932) tracks the MSCI EAFE Index and hedges the currency exposure.
- Precision U.S. Currency Neutral Index Fund (AIS931) tracks the S&P 500 and hedges the exposure to U.S. dollars.
The MER of all the above funds is 0.54%, which is significantly higher for Canadian equities but only slightly higher for U.S. and EAFE equities when compared to the equivalent TD e-Series funds. Unfortunately, Altamira does not offer a bond index fund and the bond mutual funds available have MERs of more than 1.5% but they do offer a decent T-bill fund to park your cash (MER of 0.52%).
