RESP Portfolio Management

Managing the RESP Portfolio could be challenging as it involves a certain degree of expertise by your Financial Advisor.Most of us do not have time as well as expertise to make moves in the portfolio according to Market conditions.The common investment vehicle in RESPs are Stocks,Bonds,GIC’s or a combination all three.As most of the clients like a balanced portfolio which contains 60% stocks and 40% fixed income.But balanced portfolios have not generated the desired results as we have been in the low interest rate environment for the last 20 years. 

As a rule of thumb until the child turns the age of 13 it make more sense to be in either Balanced,Moderate Aggressive or Aggressive Portfolio depending on your risk profile. Once the child turns 12 it make a lot of sense to scale back the Market risk in the portfolio.Once the child turns 15 it is a good idea to be in a conservative portfolio as the child will be needing the funds in next couple of years.

ETF vs MUTUAL FUNDS

Some clients like ETF’s instead of Mutual Funds. ETF’s have become very popular in the last few years as the markets have done well.But one should be aware of that ETFs are not actively managed and there is no downside protection.Also ETFs are not very transparent in disclosing the fees associated with them. A full comparison of ETF vs Mutual Fund is provided Please click here ETF v/s Mutual Fund