The David Miner Communiqué—Spring
David with daughter Amelia. Both
completed the Sporting Life 10K run
along Yonge St. in Toronto in May.
Spring – At last!
The snow is gone. I thought it would last forever! As always, Dorinda and I took a ski
holiday in early March, a post-RSP season ritual which this year took us back to
Whistler, B.C. Later in March, I completed the 30 kilometer Around the Bay Race in
Hamilton with friends. This event was a pleasant non-competitive run for us, with lots
of stops to take pictures (see page 3). In May, I ran in the Sporting Life 10K and
Mississauga Half-Marathon. No full marathons are planned for this spring, but will be
on the agenda for this fall.
"Wealth is the product of man's
capacity to think."
an important four letter word that means
much more than the latest fad in sandwiches.
The first investment wrap program arrived in Canada through Toronto-
Dominion Bank in the late 1980's and was modeled off the young and growing
wrap business in the United States. Very simply, wrap programs used technology
to allow portfolio managers to manage model portfolios at the highest
level. Security trades were done in bulk and security positions allocated across
many individual accounts automatically. At the individual level, the client had
at least the perception of a personal and privately managed portfolio; although,
it was computer software that executed most of the detail work. In many ways,
wrap programs emulated mutual funds, with the exception that investors held
individual securities instead of mutual fund units.
Many wrap programs were subsequently introduced through the brokerage
industry, but were expensive and not nearly as cost effective as mutual funds.
Even to this day, some wrap programs just do not make good sense (despite
Dorinda and David enjoying the scenery in Whistler, B.C. in March.
Over the last twenty years, wrap has evolved in many positive ways, including
the introduction and refinement of mutual fund wraps. Some excellent and very
cost effective mutual fund wrap solutions are now available. Many good firms
are in the business and account minimums have dropped substantially. While
some wrap programs still require minimums of $500,000 to $1 million, some
mutual fund wraps allow entry for as little as $5,000. Technical efficiencies
allow the mutual fund wrap programs to be offered at essentially the same
management expense ratios as the underlying funds (i.e.; at virtually no
additional cost in many cases).
The mutual fund wrap (or “fund of funds”) approach, oddly offers investors a number
of advantages over direct investment in mutual funds, including:
- With wrap programs, advisors access the portfolio managers’ expertise and sophisticated
first-hand knowledge of financial markets to build a strategy that best fits investor
objectives. Fund allocation in wrap programs is done by educated, trained, experienced,
and focused portfolio managers skilled in risk management.
- Most brokers and financial advisors are hesitant to put too many funds in portfolios.
Exposure to important areas such as emerging markets or global small cap is often
missed as even healthy allocations may be too small to bother. Even the most conservative
portfolios deserve small allocation to these markets to both increase return and
- Fine tuning is done automatically by portfolio managers in wrap programs. In a
portfolio of individual securities or funds, retail advisors can only get involved in client
transactions (and portfolio tuning) if the amounts are large enough.
- Mutual fund wraps offer exposure across many areas efficiently – domestic equity,
global equity, small cap, income trusts, bonds, and more. Individual retail portfolios are
often tilted and over-weighted in one area or another. Wrap is often the better way.
David's close encounter with the Grim
Reaper: Enjoying the "Around the Bay" 30K
run in Hamilton with friends..
Mutual Fund Wrap programs can
make sense for most investors
for either 100% of their holdings
or at least a significant core position
of their investments. There
are a number of selections of
wrap programs available today
from such well-known firms as
(“Elements”), TD (“MAP”), Fidelity,
CI, and more. Each firm
offers different wraps to fit different
investment profiles. Many
investors hold more than one
wrap and may hold individual
fund positions as well.
AGF Elements -- Wrap with a Difference
In this communiqué, we are pleased to give focus to AGF. AGF introduced Elements
about a year and a half ago and has experienced solid success with this wrap program
since. AGF has a good team of Canadian equity and fixed income managers. Through
AGF International Advisors, AGF capably also offers solid global equity management.
While many of the AGF funds have themselves performed well, at a higher level, the
asset allocation provided through Elements has been a critical factor in the success of
the Elements program.
There are three critical features that make the 5 AGF Elements Plans (i.e., the 5 AGF
funds of AGF funds) attractive.
- At the highest level, fund and asset allocation is managed by an independent investment
consulting firm called Wilshire and Associates, one of the largest such consulting
firms in the world. Wilshire has a mandate to both optimize return and mitigate
- Each of the 5 AGF Elements Portfolios, from AGF Elements Balanced Portfolio
to AGF Elements Global Portfolio, has a benchmark against which it is measured. At
the end of three years, if the benchmark is not reached during that period, AGF will
return up to 0.9% additional to investors, a unique benefit in the industry.
- Notwithstanding the potential bonus of up to 0.9% every three years, the management expense ratios for Elements are attractive.
Of course, like all investment funds, we are pleased to offer all AGF Elements programs
at 0% commission through David Miner and Associates. Here are the AGF
Elements line up, with inception and one year returns to April 30, 2007:
||One Year Return to
April 30, 2007
|Return Since Inception (date)
|AGF Elements Balanced Portfolio
|AGF Elements Conservative Portfolio
|AGF Elements Global Portfolio
AGF Elements Growth Portfolio
AGF Elements Yield Portfolio
For a full breakdown of funds within the Elements Portfolios, go to www.AGF.com.
In the “AGF Product Finder”, click “Elements”, then go to “Financials and MRFPs”.
To discuss Elements in greater detail, contact us at 905-949-3639 or 1-866-93-
MINER or firstname.lastname@example.org.
Here are a few things to keep in mind before you invest:
- Let us guide you through the maze of choices that are available to you.
- Do not pay commissions – front end or back end. Keep your transactions no load
- maximize your returns, maintain your flexibility and minimize your costs.
- Ensure that you have adequate exposure to global markets. Our Canadian stock
market is relatively small --- too small to keep all of your savings.
"When you get right down to the meaning of the word 'succeed'
you find that it simply means to follow through"
- F W Nichol
Mutual Fund performance includes changes in share
value and reinvestment of all dividends but do not take
into account sales, redemption, distribution of optional
charges or income takes which may have reduced returns.
Fees and expenses are associated with mutual
fund investments. Please read the prospectus before
investing. Mutual funds are not guaranteed, their values
change frequently and past performance may not be
repeated. Mutual funds are not insured by the Canada
Deposit Insurance Corporation or any other deposit insurer
and are not guaranteed.