It’s been over year since my last RESP portfolio update and probably would have been longer if it wasn’t for a reader request for a quick update. Our RESP portfolio for our child is setup with TD e-Series mutual funds which provide a low cost way to index the market. I chose to go with mutual funds instead of ETFs as I like the freedom of adding small amounts at a time without having to pay a commission for every purchase.
What did the diversified portfolio consist of? The long term plan for the RESP is to be aggressive for the first 10 years (90% equities 10% bonds) with increasing fixed income as the University tuition nears. I copied the table from my RESP strategy article below.
Index 0-10yrs 10-14yrs 14-17yrs 18yrs + Canadian Equity 30% 20% 10% 0% US Equity 30% 20% 10% 0% International Equity 30% 20% 10% 0% Canadian Bonds 10% 40% 35% 0% GIC’s 0% 0% 35+% 75% Money Market Fund 0% 0% 0% 25%
Although my plan to is follow the allocation stated in the table, things have deviated a little due to the market volatility in 2008 then in 2009. In 2008, I added a little to equities within this portfolio, but in hindsight, I should have added much more. In 2009, I let cash build in the account as I fully expected a market correction to follow the strong rally. However, as we all know, that hasn’t happened… yet.
Below is my actual allocation and portfolio values thus far. We plan to deposit another $2,500 into the account in a couple weeks.
Portfolio as of March 17, 2010
|Price Per |
|TD CDN Money Mkt||197.464||$10.00||$1,974.64||32.780||$1,974.64|
|TD CDN Index-e**||67.609||$19.25||$1,301.47||21.600||$1,246.99|
|TD US Index-e**||51.914||$20.48||$1,063.20||17.650||$1,144.09|
|TD CDN Bond Index-e**||53.033||$10.90||$578.06||9.590||$571.67|
|TD Int’l Index-e**||124.416||$8.90||$1,107.30||18.380||$1,239.03|
|Total as of Mar 17, 2010||$6,024.67||$6,176.42|
I started his portfolio in early 2008 near the peak of the market so there was a point in early 2009 where the market value of this portfolio was significantly below book value. It’s comforting to see that the portfolio has climbed to almost the break even point
Going forward, I hope to deploy some of the cash as opportunities arise. The cash portion of the portfolio is already 32% of the portfolio not counting the upcoming contribution.
If you have setup an RESP, who is your provider? What is your investment strategy?
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