Posted on: 13-07-10 14:30:41
Quote:Is it the Diploma Investment fund, linked below:
Originally posted by rsbagwell
No. Investments have to be in the plan.
But it is true
http://www.inalco.com/english/individual/investment/funds/diploma/diploma.jsp
This has a terrible rate of return....maybe that's why they are giving this incentive.
And making subscribers lock in their money for 17 years.
I guess you can still come out ahead as long as the RoR is above -15%
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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
Quote:
I guess you can still come out ahead as long as the RoR is above -15%
I guess...........
Quote:The "fund" is shackled by a whopping 3.26% MER.
Originally posted by ashedfc
3. The funds down-capture is significant & upside capture is not significant. Means, when the market falls, this fund will fall significantly, & when the market rises this fund will rise less significantly.
All the holdings are other index funds or DEX index bonds.
Given this, the fees are shameful and daylight robbery.
The 15% "bonus" is certainly not being paid from the returns of the fund.
There's only one place that bonus is coming out from....
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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
Quote:
Originally posted by ashedfc
The 15% bonus comes with a lot of strings attached (& its for IA's Diploma plan only). Biggest concern are-
1. You loose control of investment choices (as its a Group Plan).
2. You have to continue to contribute the regular deposits (or else there are penalties).
3. The funds down-capture is significant & upside capture is not significant. Means, when the market falls, this fund will fall significantly, & when the market rises this fund will rise less significantly.
4. For an 18yr commitment 15% bonus & negligible growth is ridiculous. 18 yrs will see minimum 3 recessions, & 3 economic expansions (commonly called Boom time). You want to preserve your capability of investment selection to benefit from economic expansion.
I would suggest RESP investors to to stay away from all Group plans, just to avoid penalties. Rather, go for Individual or Family Plans, with multiple investment choices, & no penalties. Flexibility to pay as less as you want or as much as you want. Like any Conservative asset allocation fund.
Off course, lest say you skip one year & double the payment next year - you don't miss out on the Govt Grant.
I was also looking into this fund. Thanks for the comments. What makes their fund more susceptible to the down side and not equivalently to the up side as the market goes up/down?
Are other company's RESP funds really that much better? or are you saying better to do this myself in a self directed account? but for 17yrs of investing later, I may even lose money rather than gain anything for my child
