Q&A: How Good Are My Mutual Funds?

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Q – I am need of some
advice on some
 mutual funds that I have purchased through a broker/financial adviser. They are as follows.

1) CI Cambridge Canadian Equity Corporate Class A. 5 per cent front load, MER 2.45 per cent.

2) CI Cambridge Canadian Dividend Fund Class A. 5 per cent front load, MER 2.41 per cent.

3) CI Cambridge Asset Allocation Corporate Class A. 5 per cent front load. MER 2.44 per cent.

Are these good value mutual funds (fees and growth) for a
 medium risk investor who invests $4,500 a 
month? – Garry L.

A – For starters, I can say with certainty that this adviser will be your best buddy. He should be, because you’re paying way too much for these funds. The 5 per cent front-end load is excessive by today’s standards. Many advisers will sell you the A class funds on a front-end load basis at zero commission, just to get your business on their books and collect the trailer fees. Tell the adviser that’s the deal you want going forward. If he balks, go elsewhere. Any broker or dealer can sell you these funds. Alternatively, set up a fee-based account. That will save you the sales commission and allow you to buy F class funds with lower MERs.

The funds themselves are good quality, with strong performance records. But given the amount of money you are investing you may wish to diversify more. – G.P.

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