Tangerine’s New Funds First Look

January 3rd, 2021 by Potato

Tangerine just released some new versions of its all-in-one mutual funds with lower fees. They have three flavours: 100% equities, 75-25, and 60-40. The new fees are 0.65%, which is competitive with robo-advisors (the actual MER will have to wait until a year has passed to be reported, but will likely be about 0.7%).

I’ve been waiting a long time for this news. It was over a year ago when they invited me to a survey about lower-cost versions of their funds and the future of their investment arm. I should note that it was a survey just as a regular customer — they didn’t hire me to consult. But, if you’re listening Tangerine, you could. I like consultant money. And the first thing I’d tell you is to not launch a new set of funds with a confusing “ETF” in the title, to just lower the fees on your existing funds. Yes, the funds all have names like “Equity Growth ETF Portfolio” even though they are not ETFs. (Though they are not the first bank to so confusingly name their mutual funds)

After a bit of confusion between announcing the funds in the fall and now, people with the old funds can finally move over to the new ones. And they made it super-easy to do: when you log into your investment account, there’s a great big “switch my portfolio” button. That’ll take you to a risk tolerance questionnaire, after which you can choose your new, lower-fee fund (or one of the old ones if you really want), and your funds will be moved over.

I’m glad it’s finally here, and gives people who have long been wringing their hands about sticking with Tangerine’s super-easy funds or switching to a robo-advisor a reason to stay. It may make Tangerine the killer choice for ease-of-use, especially in non-registered accounts. (Though if they could have shaved another 10 bp off the cost then they could have blown the robos out of the water)

However, I think I’ve read through all the documents on their site, and I can’t for the life of me find what they’re going to actually invest in. They mention an equity and fixed income split, and then a global equity index as the benchmark for the equity part. Does that mean there won’t be any home country bias in the new funds? They’re going to hold ETFs (possibly related party ones, which would likely mean the Scotia ones), but don’t spell out specifically which ones. I think Tangerine’s earned a fair bit of goodwill over the years, so for the moment I’m switching my portfolio there over to the new lower-cost funds to see how it goes, and trusting that whatever the specifics are that they’ll be fine, but some more easy to find details would have been nice (also, consulting money please).

Stephen Colbert making the 'give it to me now' grabby hand

3 Responses to “Tangerine’s New Funds First Look”

  1. Potato Says:

    Update: they just posted their holdings as of Nov 30, 2020 and indeed these are not putting any home country bias in place — Canada is just 2.7% of the allocation! And indeed, they are holding Scotia ETFs.

    Admittedly the first report is just a few weeks into the funds’ existence, so the allocation likely hasn’t settled down yet (and the 6% in cash likely speaks to that), but given the benchmark they chose I think that confirms that the new funds are significant deviations from the old ones, and not just lower MER versions of the classic Tangerine funds.

  2. Gerry Veenstra Says:

    For some reason I’d not checked in to the Holy Potato site for like a year or more, because he’d kind of intimated that the site was on the back-burner and wasn’t really part of his future plans. But I checked in again just now, and wowzers, discovered that there’s a series of awesome posts to celebrate 2021! I’m so pleased. The new Tangerine funds are pretty great. When my (now deceased) mom was managing her own finances for the first time a decade or more back I wish I’d know about Tangerine’s funds and advised her to invest in them. Set and forget. And don’t look! But she chose Edwards Jones, experienced the 2008 downturn and sold everything at the bottom. Sadness. And 0.65% is way better than 1.07%, and only a little better than the Vanguard/iShares portfolio ETFs, and you can regularly add to them as you can with TD e-series funds — thus pretty awesome overall. Good to have you back, Potato.

  3. Potato Says:

    Thanks Gerry!

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