Best Series D Mutual Funds
As a self-invested investor, you won’t get professional advice from a trader on which investment funds you should hold that don’t pay commission. So instead, opt for a low-cost tracker fund or an equivalent that doesn’t carry an early redemption charge, particularly if you are investing low amounts.
RBC Direct Investing offers its clients access to D-Series D investment funds and options to purchase low-fee mutual funds. RBC is available in a wide range of investment funds from different fund companies and offers a fee structure tailored to individual investors. For Robo-advisor investors, Robo-advisory is digital advice on portfolio holdings, ETFs and low-cost investment fund mixes.
Series D units can be purchased at a discount through brokers such as RBC Direct Investing and PH & N Investment Services. Series D is available to customers who have invested at least $500 in an investment fund account, with a minimum investment of about $25 later. In addition, discount mutual funds are available from low-interest funds such as Phillips Hager, North America and Goodman. At the same time, RBC has added Series D funds from Invesco, BlackRock and MacKenzie.
The appeal of Series D DIY funds is that they save money compared to regular funds. Mutual funds create D-share classes of funds to cater to the demand for less burdensome versions of popular funds. Expanding the availability of Series D funds eases criticism that fund companies are not expanding the benefits of choice to DIY investors.
They do not have to buy their investment funds directly from RBC Direct Investing but do purchase selected Mawer Investment Management Ltd., a respected medium-sized independent Canadian investment firm whose funds are quoted from industry sources. One of the most commonly held D-share investment funds is PIMCO Real Return D (compare it with PIMCo Real Return A, PIMco Real Return B and PIMC Real Return C. The D-share fund class is the only one that is not used and has the lowest net cost ratio. D shares are not available in the other classes designed for the purchase of shares by DIY investors.
Some discount brokers offer a full range of funds with low fees, while others offer a limited choice. These arrangements are best suited to high net worth investors who are recommended investment funds by their advisers, which do not pay commission and therefore have lower costs. Three other low-cost fund providers – Steadyhand, Mawer and Leith Wheeler – do not charge tracker fees.
Aviation-oriented investors who have their heads in the clouds have many investment opportunities structured around the aerospace and defence industries, and they can do so in an open format. For example, RBC Direct Investing, which pioneered the D Series fund in 2007 and six other companies, is offering a low-trailer version of its now-financed D Series fund worth $200 or more. More risk-tolerant investors can invest in individual stocks, including Boeing Company, Northrop Grumman Corporation and Lockheed Martin.
Two brokerage firms will begin selling low-cost Series D investments next month, and three companies – BlackRock, Invesco and Mackenzie – target DIY investors. For no apparent reason, Mawer, Vanguard Canada and a small group of mutual fund providers are refusing to follow the common practice of mutual funds collecting commission from discount brokers behind the scenes. As a result, many online discount brokers do not allow you to buy large investment funds, which many do-it-yourself investors benefit from on their platforms.
Funds lagged 71% of their peers last year, in part because the equity side was heavily dominated by financial and energy stocks, which have performed poorly so far in 2020, even as these sectors gain momentum. Loren Moran and Michael Stack, on the bond side, hold high-quality corporate and Treasury bonds. Firms with less glossy balance sheets and inconsistent profits are thriving, so funds prefer higher-quality firms.
The portfolio averages a hefty portion of industrial and healthcare stocks and less technology than comparable funds. The 10-year record of funds beating their peers is well above average in terms of risk. The fund also beats most of its peer funds by investing in companies with growth and value traits.
The Fidelity Select Defense & Aerospace Fund is a mid-cap value fund seeking to maximize capital appreciation. Approximately 80% of the Fund’s investments are in ordinary shares of companies whose main activities are research, manufacturing, marketing and product services in the aerospace and defence industries. Since its founding in 1984, the fund has performed well with an average annual return of 12.15% over the last 10 years.
Most fund investments are in technology and industrial stocks, and turnover can be as high as 40%. Mutual funds pool money reserved for different investors to invest in a portfolio of asset classes such as stocks and bonds. They are run by fund managers who are usually highly educated mathematicians who are tasked with trading the fund’s contents based on how well they predict the value of future fund investments.
One of the most popular and common types of mutual funds tends to be equity funds that invest in equities, including Canadian equities and small and large companies. When an investor buys shares in an investment fund on the stock exchange, the shares are bought by the fund broker, who then buys shares from the investor.
Those who invest regularly can build up considerable wealth. The Continuous Trail Fund switches from an RBC client fund for investors to a balanced asset allocation model.
Index investments offer DIY investors better returns over the long term than most investment trusts, but let’s look at human behaviour in times of stock market stress. If you own long-term mutual funds and ETFs, you will end up with less volatility caused by people taking time to leave the stock market.
