Q&A With Gordon Pape: Where Should My Inheritance Be Invested?

Q – I will shortly be receiving a $300,000 inheritance and am considering investing in a balanced fund ETF. Would you suggest investing the total sum at one go or over a period of time? – Ray M.

A – For starters, I would not recommend investing all the money in a
single fund. You’ll reduce risk if you spread it around.

Second, balanced ETFs are very new on the scene. None have a long-term track record that allows us to see how well they do over-time or how they stack up against their mutual fund counterparts. Choosing one is like throwing darts — maybe you’ll get lucky and hit the target, maybe not.

Before you invest any money, I suggest you look at the Mawer Balanced
Fund from Calgary-based Mawer Investments. It’s a mutual fund with an excellent long-term track record and a reasonable management expense ratio of 0.91 per cent.

A more aggressive alternative is Dynamic Power Global Balanced Class
Series A, managed by Noah Blackstein. As of Aug. 31, it showed a 10-
year average annual compound rate of return of 10.3 per cent.

Those two finds in combination would provide a nice mix of styles and geographic diversification. – G.P.

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