Fund's cost-cutting to get passed onto clients, say advisors

Investors worried about the move by a major Canadian mutual fund to bring portfolio management in-house are more likely to benefit from the decision than be hurt by it, say advisors.

TD Asset Management Inc.’s latest move to bring its international growth fund in-house will save cash, according to a Toronto financial advisor, and may actually benefit clients.

“Its an advantageous situation for everyone. When moving things in-house there are cost-savings,” says Sudhir Bhalla of GN Financial Group. “It’s a benefit to the client in the sense that the costs become a little bit less, and the returns a bit better.”

TDAM announced this week it will take over from Echo Point Investment Management as portfolio advisor of its TD International Growth Fund effective November 12.

Financial educator and owner of, Jim Yih, believes these changes are relatively insignificant, as fund-management changes happen all the time with minimal impact on money spent or earned. “It’s a challenge for any investor, advisor and the media to keep up with every little change that occurs,” he says.

Yih recommends investors worry less about fund-management changes and turn their attention to savings. “The rate of return is considered one of the key drivers to building wealth; the higher return you get, the more money you will have,” he explains. “But the secret to wealth lies more in how much you save, rather than your rate of return.”

Bhalla argues that whether a client should focus on saving or investing depends on their individual goals. For example, a younger client may take greater risks, while an older client chooses to play it safe, he explains.

“One size does not fit all,” he says. “There are different types of investors. One may be very, very secure ... others are looking for growth. It all depends on what kind of life you have.”

TDAM plans to keep the fund’s objective as is, but will alter the management approach to reflect proprietary research used to identify investment opportunities in high-quality companies.