Missing Comfort with TD Comfort Balanced Fund

Perhaps one of the biggest ironies in TD’s Mutual Fund line up is in the name on their largest mutual fund, the TD Comfort Balanced Portfolio Fund. The only people comfortable with this mutual fund are the investment advisors who sold it and continue to collect a trailer fee on the sub-par performance. This mutual fund is expensive!

The fund which is split about 50/50 between equities and bonds has a Management Expense ratio of 1.92%, and pays a nice trailer fee to advisors who sell it, however, it is clear that the fee has detracted from long term performance. The fund has under-performed its closest ETF peer by a significant amount!

The iShares Core Balanced ETF Portfolio (XBAL) is almost identical to this mutual fund in terms of its balanced asset allocation, however, it’s meager 0.20%. MER is a fraction of the TD Mutual Fund’s MER. This has allowed its performance to flourish compared to that of the mutual fund.

A comparison of their annualized performance as of Dec 31, 2019 follows:

Mutual Fund vs ETF

1 YR

3 YR

5 YR

TD Comfort Balanced Fund

11.53

3.82

3.75

XBAL

15.19

5.81

5.03

As can be seen from the table, the mutual fund MER certainly has a large impact in the short run and over the long run. This should leave investors very uncomfortable with the TD Comfort Balanced Portfolio Fund.