Tag Archives: mutuals

Can I Transfer my RRSP and TFSA Mutual Funds from BMO to a Self Directed InvestorLine Account?

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In blissful ignorance of any rules, I applied to transfer my RRSP mutual funds from BMO to my self directed InvestorLine account. The funds were all ones issued by BMO itself. In fact they were all ancient funds dating back to the time of the runaway success of the book, The Wealthy Barber. I wish the funds had been a fraction as successful as the book!

Fortunately, the transfers went smoothly. I was able to successfully transfer a variety of BMO mutual funds, including some index funds and a mortgage and short term income fund.

Why Did I Still Have These BMO Mutual Funds?

I used to be a charter member of the Ostrich School of RRSP Investing. Shortly after I first bought these funds, the markets tanked. Since my largest investment was in the TSX index fund, my mutual fund tanked too. (Thanks Nortel!)

The Ostrich School of RRSP Investing

As all ostriches are said to do (but I don’t think any REAL ostriches ever do) I stuck my head in the sand and refused to look at any more statements for those RRSPs. BMO indulged me by sending me separate statements for my mutual funds and my GICs and I quickly learned how to tell without opening the envelope which was which. Carefully once each year, I would slice open the four mutual fund envelopes, extract the statements, shred the first three unread, and file the year end report in my binder without looking past the “Dear customer” line.

Can you believe I’m actually a debt-free homeowner with two cars and money in the bank?

Oh. You’ve met my husband. Well, yes, he’s probably largely why…..

….although the fact I stopped investing in the stock market is also a factor. PLUS I never sold the mutual funds. And they were *INDEX* mutual funds (and a fixed income one.) All the Couch Potatoes out there are waving their arms and shouting out that sooner or later the Index returns to the norm and over the long run growth occurs. And they are right. It did and it has. The funds actually have earned a respectable annual return over the long, lonely years. Not that that is going to stop me from selling them!

Assembling the Jigsaw Puzzle of Our Investments One Curious Amoeba-Shaped Piece at a Time

Moving these mutual funds to my self-directed account with InvestorLine placed one piece properly in the puzzle that is our investment picture. There are still a few pieces of the edge missing and, as usual, some of the sky, but we’re starting to be able to recognize what we’re trying to build.

Yes, You Can Transfer Many BMO Mutual Funds In Kind to a Self Directed InvestorLine Account

So if you are planning to move your RRSP or TFSA mutual fund investments from BMO to InvestorLine it should progress smoothly. When in doubt, talk to the advisor at your branch with the most experience with InvestorLine or call InvestorLine directly. And if you have time, share a comment with us about how it goes.

You can also check whether InvestorLine sells the same fund as a no-fee fund from this list. If they do, there’s a good chance the transfer with happen smoothly.

There are a few funds out there that are not available except from their issuer. For example, you won’t be able to move ING Streetwise Funds to another institution.

Further Information

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Did you ever try to transfer mutual funds in kind directly into a self-directed investing account? Was it possible? Please share your experiences with a comment.

Be Wary of the Unrealized Gain or Loss Column for Re-invested Mutual Funds with BMO InvestorLine

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On the My Holdings page of a BMO InvestorLine account is a column reporting the unrealized gain or loss of each asset. Benevolently, assets that have zero gain or loss are reported in green. Alarmingly unrealized losses are reported in red. Which is probably why I noticed something was slightly odd with some mutual funds I held. I decided to look more closely at these funds and what I learned taught me to be wary of the unrealized gain value reported on the InvestorLine My Holdings page for mutual funds.

The fund I looked closely at was the BMO Mortgage and Short Term Income fund. This is one of the funds I bought pre-house, pre-kids when a book called The Wealthy Barber
was new and popular. Ask your great-grandparents about it, they probably read it too.

Anyway, the fund had been ticking along quietly re-investing itself for a zillion years earning significantly less than if I’d had the sense to invest it somewhere else. I think it’s been earning about 2.9% over the last 10 years.

What’s Reported on the My Holdings page at BMO InvestorLine

This page gives a reasonably useful snapshot of your holdings. It includes investment Names, Symbols, Quantity, Average Cost, Current Price, Market Value, Unrealized gain/loss, Unrealized gain/loss %, Portfolio %, Details, and Action. The Current Price is actually the 15-20 minute delayed price. Details includes things like a link to the Analysts’ opinions and a flag if a new opinion has been posted in the past 24 hours. Action is a drop-down list of things like Buy, Sell, Switch, Quotes+, and History.

It’s the Unrealized gain/loss though that caught my attention.

I’ll call the BMO Mortgage and Short Term Income Fund MSTIF for the fun of it. MSTIF pays a monthly dividend. I have this set to DRIP so the dividend is reinvested as new shares. That could increase or decrease my Average Cost depending on whether the fund is up or down.  And this change to the Average Cost appears to be part of the problem with the Unrealized Gain/Loss reporting.

When I brought this fund into my InvestorLine account, part of it had a value of $1000 which was calculated as 88.9458 units at $11.2428 each. Today, that holding is 92.2559 units at $11.2791 for a value of $1040.56.

My Holdings reports my Unrealized Gain as $3.13. Given my monthly distribution is close to this number, it didn’t seem likely.

When I do the real math, I can see my gain is 1040.56 – 1000 = 40.56. That’s a 4% gain not the 0.3% being reported on My Holdings.

So what gives? Why is the value so out of whack?

The system is calculating my starting value as the current number of shares times the adjusted cost.  But both the adjusted cost and the number of units are changing with each reinvested monthly dividend payment. They don’t reflect my starting investment.

What I’m expecting to see on the report is a gain calculated as (how much the fund is worth now) minus (how much the fund was worth when I bought it (or in this case transferred it in)).

Instead, what’s being reported is the gain calculated as (how much the fund is worth now) minus (how much the fund was worth after the last dividend payment).

The reported number is marginally useful, but it isn’t what it seems to be. You have to be wary when looking at the report and remember it’s only reporting part of the gain or loss, not the total gain or loss.

Why Is the InvestorLine Mutual Fund Net Gain/Loss Different than Expectation?

It looks to me like InvestorLine ran into a screen space constraint.

They could report the original number of units, OR
report the correct current number of units.

They appear to have chosen to show the correct number of  units which allows the default programming to show the correct current value for the account.

The InvestorLine Net Gain/Loss Reporting is Correct so long as You are Aware of What is Being Reported

I suppose it would be nice if they had room for more columns to show the initial purchased cost, so they could calculate the total net gain/loss.

At this time, however, they seem to be doing the best they can with limited screen space.

And so long as you are aware of what they are reporting, it works fine.

Further Conclusion
For those of you who are thinking: Why on earth are you holding MSTIF?! Don’t worry. I’ve been consolidating various RRSP accounts that were scattered across most of the Canadian financial industry. In slow, ponderous, measured steps, I’m correcting our investments. In the meantime, at least MYTIF is in no danger of losing money. I have lots of other investments that are busily doing that!

Related Reading

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Have you noticed any odd calculations in your net gains/losses at InvestorLine or another brokerage? Do you have any words of caution to share with the rest of us? Please share your experiences with a comment.