An Overview of Tangerine Investment Funds

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Lisa MacColl is a writer, investor and former compliance consultant in the group retirement and individual wealth management fields. Lisa has written about personal finance for 14 years and currently writes about investing and investment providers for Wealthsimple. Lisa's past work has been published in Canadian Money Saver, Advisor’s Edge, CBC, and CreditCards.ca. She was a nominee for the 2015 Oktoberfest Women of the Year, Professional Category. Lisa holds an M.A. and B.A. from the Wilfrid Laurier University.

Tangerine was launched in Canada in 1997 as ING Direct, and was acquired by Scotiabank in 2012, when it’s name was changed to Tangerine. It is the largest direct bank in Canada with assets of $4 billion.

Like any mutual fund, Tangerine mutual funds are a pooled investment product, which means many investors buy small slices of the mutual fund. Here’s how they work.

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How do Tangerine mutual funds work?

Tangerine mutual funds are bought and sold on the stock exchange, so the value can fluctuate. The fund manager, Tangerine Investment Management Inc, a wholly owned subsidiary of Tangerine Bank, uses the pooled money from the many investors to build a portfolio by buying underlying stocks, bonds, and other investable assets.

The earnings of mutual fund portfolios like Tangerine’s can include dividends, interest, and capital gains. Some mutual funds are comprised of investments that track/replicate a stock index, and some mutual funds may include derivatives, futures, hedged funds, and other high-risk investments. That’s why it’s important to read the prospectus and fund facts before you invest in a mutual fund.

Some mutual funds are “actively managed,” which means the portfolio manager buys and sells underlying stocks, bonds, and other investment products and makes adjustments often to achieve the goals of the fund. Others are “passively managed,” which means the portfolio manager follows an index and seeks to replicate its returns. Tangerine funds are passively managed, and follow various underlying indexes. You can get all the details in the Fund Facts and Prospectus for the portfolio you are interested in.

Passive funds often have “index” in the name of the fund. The main difference between actively and passively managed funds lies in the investment philosophy. Actively managed funds buy and sell underlying stocks to meet investment goals, whereas a manager of a passively managed fund buys the underlying stocks in the same proportion as the index it is following. Whether actively or passively managed, there are fees, charges, and commissions associated with mutual funds that may reduce your investment returns and can vary, although index funds are typically less expensive. It’s wise to read the fund facts before you buy mutual funds.

All mutual funds, including the funds offered by Tangerine, fall into a few general categories: Money Market, Bond/Income, Balanced, Equity, Global, and Other, which include sector-specific and emerging markets. They have different levels of risk, and different fees associated with them. In general, the higher the risk, the more potential for wide variations in the unit price and profit/loss. The mutual fund advisor will take the time to walk through some investment questions so that you can have a portfolio you are comfortable with.

Tangerine offers investors the choice of five portfolio options, with varying degrees of risk. Investors cannot purchase individual mutual funds in Tangerine. All Tangerine portfolios are passively managed, and follow an indexing strategy, seeking to replicate underlying indexes. All Tangerine portfolios have the same Management Expense Ratio (MER), which is the fee they charge to manage the funds. There may be other fees associated with the portfolios, so it’s important to read the Fund Facts and Prospectus carefully so you understand what you are investing in.

The chart below provides information on the five investment portfolios that Tangerine offers. The data was compiled on October 26, 2020, by consulting the Tangerine fund pages. As the value of mutual funds can fluctuate, the information may have changed. Please consult the fund pages for current information.

SymbolInvestment Portfolio Name3-year return5-year returnMERAssets Under Management
INI210Tangerine Balanced Income Portfolio5.77%4.88%1.07%$458.18 million
INI220Tangerine Balanced Portfolio6.22%6.24%1.07%$1484.76 million
INI230Tangerine Balanced Growth Portfolio6.40%6.99%1.07%$1207.23 million
INI235Tangerine Dividend Portfolio0.83%N/A inception date 20161.07%$164.88 million
INI240Tangerine Equity Growth Portfolio6.38%8.06%1.07%$1036.80 million

1. Tangerine Balanced Income Portfolio (INI210)

AUM $458.18 million| MER 1.07%| 3 YR Return 5.77% | 5 YR Return 4.88% The Tangerine Balanced Income Portfolio is a low-risk fund portfolio consisting of 70% bonds and 30% stocks. The fund makes annual distributions and has $25 minimum investment amount. Its goal is income with some capital appreciation.

2. Tangerine Balanced Portfolio (INI220)

AUM $1484.76 million| MER 1.07%| 3 YR Return 6.22%| 5 YR Return 6.24% The Tangerine Balanced Portfolio invests 40% in Bonds and 60% in stocks to provide a balance between income and capital appreciation. There is a $25 minimum investment required, and the fund is considered low to medium risk.

3. Tangerine Balanced Growth Portfolio (INI230)

AUM $1207.23 million | MER 1.07% | 3 YR Return 6.4% | 5 YR Return 6.99% The Tangerine Balanced Growth Portfolio invests 75% in stocks and 25% in bonds, making it more risky than the Balanced and Balanced Income Portfolio Funds. Its goal is primarily long-term capital appreciation with some income. There is a $25 minimum investment required and it is considered low to medium risk.

4. Tangerine Dividend Portfolio (INI235)

AUM $164.88 million | MER 1.07% | 3 YR Return 0.83% | 5 YR Return N/A The Tangerine Dividend Portfolio invests 50% in Canadian dividend-paying equity stocks and 50% in U.S. and International dividend-paying equity stocks. It is considered medium risk, and suitable for investors looking for potential growth and dividend income. There is a $25 minimum investment required and investors can automatically reinvest the dividends to purchase more units.

5. Tangerine Equity Growth Portfolio (INI240)

AUM $1036.80| MER 1.07% | 3 YR Return 6.38% | 5 YR Return 8.06% The Tangerine Equity Growth Portfolio is invested in equal proportions in Canadian, U.S. and International equity stocks. It is considered medium to high risk as the stock market can fluctuate and the value can increase or decrease. Funds with more volatility have more risk. There is $25 minimum investment required.

How to invest in Tangerine investment portfolios

Step 1: Open a Tangerine investment ccount

Tangerine does not have any bricks and mortar branches-it’s all online. To start investing in Tangerine Portfolios, you must have a Tangerine Investment Account. You cannot invest in Tangerine Portfolios if you only have a savings account. Mutual fund sales are regulated, and can only be purchased through a representative who is licensed in the province where you live. Tangerine representatives will work behind the scenes to buy and sell your investments for you in accordance with the applicable rules.

Step 2: Determine your investment profile and goals

You can speak with a Tangerine licensed representative by phone who will help you choose the portfolio that best suits your investment style and goals. You can also select the portfolio that fits your needs by yourself. Make sure you read the Fund Facts so you understand the kind of underlying investment goals the portfolio has, and what kind of index the fund will be following. All Tangerine portfolios follow a passive index philosophy.

Step 3: Begin investing

You can make a lump-sum contribution, or you can set up automatic monthly deposits from your bank account to your investment account. Tangerine Investment Accounts can be opened with a zero balance, and have a $25 minimum amount to begin investing, so always check the fund facts or ask the advisor. You can check your investment performance online.

Step 4: Keep your goals in mind

When you invest in mutual funds, the value on any given day can vary widely. depending on what the stock market has done. There can be large swings up and down, and it can sometimes seem like keeping your money in a coffee can in the backyard might be a better option, so it’s a good idea to keep your long term goals in mind. If you have concerns about what your funds are doing, check with your advisor.

If you want to change your fund direction, or take money out, ask your advisor. Normally you can redeem your units (withdraw your money) from a mutual fund at any time, although it can take 2-3 days to process.

(The information on this page was compiled by Wealthsimple in October 2020. In order to uncover this information, we looked at Tangerine’s website, press releases and third-party sites.)

A word of warning

Investors may lose some or all of their investment, and mutual fund accounts are not protected by the Canadian Deposit Insurance Corporation. Always read the fund facts and prospectus to understand what you are investing in, what level of risk is involved, and what fees and charges may be associated with the mutual fund. Please remember that all information provided here is general information and not intended to be advice. Past fund performance may not be indicative of future earnings.

Last Updated November 4, 2020

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