March 1 marks this year’s RRSP contribution deadline for Canadians. For seasoned investors with an established portfolio, it is a great time to rebalance the portfolio back to target weights with the help of the additional cash injection. However, for new investors, managing one’s own RRSP can prove to be a daunting task given the abundant choice of investment options available.
while providing access to a well-diversified portfolio spanning multiple asset classes and regions. Moreover, buying these products through discount brokerage channels saves you fees on advice and distribution, which over time can be significant. To help with ideas in this space, I use Morningstar Direct to screen for balanced Canadian-domiciled ETFs and DIY mutual funds that meet two criteria:
A four- or five-star Morningstar Rating for Funds, indicating that the fund has historically outperformed respective category peers after fees, on a risk-adjusted basis. Our data shows that although the star ratings are backward-looking, funds that have received five stars as a group outperform those that have received four stars, three stars, etc., in periods after receiving the rating.
Have received a Morningstar Quantitative Rating of gold, silver, or bronze, isolating funds that Morningstar believes will produce excess after-fee returns in the future, based on our analysis of people , parent and process .