Mutual Fund Portfolio Strategies Agenda
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Investor’s dilemma… Why diversify?
Asset allocation - Why does it matter?
Asset allocation - How it works?
Asset allocation - Why it works?
Asset allocation - What it will do for you.
Why use a Financial Advisor?
Risk vs Return
100% Equities
Expected
Return
Yes
Combinations
100% Bonds
100% T-Bills
No!
Risk/Volatility
Historical Portfolio Risk vs Return
Higher
RETURN
Aggressive
Growth
Balanced
Moderate
Conservative
Lower
VOLATILITY
Higher
Asset Allocation Investing
Made Easy …
1. A profile Questionnaire
calculates your Risk Score
3. Match to the Asset
Allocation Portfolio
Recommendation
2. Match your risk
score to your portfolio’s
Investment Objective
Aggressive
Growth
Balanced
Moderate
Conservative
Investment Personality ?
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Current Net worth
Financial Goals
Investment Time Horizon
Needs for Liquidity
Safety / Risk tolerance
Retirement Income Need
Other Income Sources
Inflation Protection
Principle Protection
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Current Income
Taxation Priorities
Portfolio Review
Past Performance
Financial Statements
Existing Investments
Family Income Needs
Estate Preservation
Wealth Transfer
What will a balanced Asset Allocation do for you ?
It will provide Good Long-term Performance !
Asset Mix Universes
Annual Return (Mean)
Asset Mix Universe
15%
14%
13%
12%
11%
10%
9%
8%
7%
6%
5%
4%
Max Frontier
Diversified Frontier
0% 2% 4% 6% 8% 10 12 14 16 18 20 22 24
% % % % % % % %
Risk (Std. Deviation)
Risk (Stdev)
Asset Allocation
Portfolio Mixes
FixedIncome
20%
FixedIncome
40%
Equity
20%
FixedIncome
80%
Conservative
FixedIncome
60%
Equity
80%
Equity
60%
Equity
40%
Moderate
Equity
100%
Aggressive
Growth
Growth
Balanced
Equity
Fixed-Income
Asset Class Best Funds Report
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Canadian equity
Canadian dividend
Income trusts
Canadian bonds
Short term bonds
Global bonds
US equity
International equity
Money market
Specialty funds
Sector markets
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AGF
Franklin Templeton
Elliott & page (Manulife)
Fidelity
AIC (buy, hold & prosper)
AIM Trimark
TD funds
Manulife / standard life
Big bank funds
Phillips Hager & north
Cartier partners
Ethical funds / credit union
Correlation… Why Does It Work?
Int'l Stocks
80.00%
US Stocks
Can. Stocks
Can. Bonds
60.00%
40.00%
20.00%
0.00%
-20.00%
-40.00%
1999
1997
1995
1993
1991
1989
1987
1985
1983
1981
1979
1977
Understanding Your Critical
Portfolio Success Factors
Your existing financial situation
Your priorities & financial goals
Your investment timeline
Your risk tolerance
Optimal asset allocation
Asset class investment selections
Time in the market !
Not timing the market!
Investment Selection Success Factors
Historically Successful Returns – ask why?
Consistent Top Quartile Rankings – ask why?
Asset Class & Volatility Expectations = Risk
How does it Compare against its own index ?
Best Funds Report for past 3, 5 & 10-years
Front End Fees, Back End Fees, or No Load?
RSP Eligible? Dollar Limits or Restrictions?
Low MER or Principle Guarantees, if possible?
Any Principle or Maturity Guarantees ?
Having your own certified financial planner …
Do you own mutual funds already?
Did you know that part of your MER is paid to someone?
Is this “someone” giving you the service you need?
Is this “someone” giving you the advice you need?
Is this “someone” giving you the respect you need?
Since you are already paying “someone” part of the MER
why not put your funds under your own control of who
this advisor should be? … Someone who deserves it !
Samuel J. Esaw, CFP, CLU, CHFC
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Certified Financial Planner
Chartered Life Underwriter
Chartered Financial Consultant
Helping build, protect & preserve estates since 1985
• Served Lawyers with the Canadian Bar Association
• Served Doctors with the Canadian Medical Association
• Now serving you with unbiased & independent advice
Well Informed …
Well Advised