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Simplii Financial Index Mutual Funds Review 2024

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In the quest to lower investment fees, Canadian investors can choose to buy low-cost ETFs directly using a discount brokerage account, or they can hold a basket of ETFs using a Robo-advisor account.

Investors can also purchase index funds like the Simplii or Tangerine index mutual funds and the TD e-Series funds.

The kinds of index funds that Simplii and Tangerine offer are mutual funds designed to replicate the returns of a benchmark index, and they are passively managed. Unlike traditional mutual funds that cost a fortune in Canada, index funds charge a lower fee.

For more details on investing options in Canada, read my posts on:

Simplii Financial (CIBC) Investment Funds

Simplii Financial is the direct banking arm of CIBC, and the mutual funds it offers are selected from the stable of funds at CIBC Securities Inc.

Simplii Investment Portfolios are diversified with various investor risk profiles in mind, and you can hold them in your RRSP, TFSA, RESP, RRIF, or LIF accounts.

This review of Simplii mutual funds covers the seven different portfolios they offer, the index funds that make them up, and associated fees (MER).

Simplii Financial Index Mutual Funds Review

1. Simplii Invest Conservative Income Portfolio

This portfolio is Simplii’s most conservative and maximizes interest income while preserving your capital. Its average management expense ratio (MER) is 0.95%.

The invest conservative income portfolio is made up of mostly money market/bond instruments and some stocks (5%) using the following funds:

  • CIBC Money Market Fund 15%
  • CIBC Canadian Short-Term Bond Index Fund 40%
  • CIBC Canadian Bond Index Fund 35%
  • CIBC Global Bond Index Fund 5%
  • CIBC Canadian Index Fund 5%

2. Simplii Invest Income Portfolio

This portfolio targets capital preservation, income, and some growth. It holds roughly 75% in bonds, 5% in cash, and 20% in stocks using:

  • CIBC Money Market Fund 5%
  • CIBC Canadian Short-Term Bond Index Fund 35%
  • CIBC Canadian Bond Index Fund 35%
  • CIBC Global Bond Index Fund 5%
  • CIBC Canadian Index Fund 5%
  • CIBC U.S. Index Fund 8%
  • CIBC European Index Fund 7%

The Invest Income portfolio has a 1.03% MER.

3. Simplii Invest Income Plus Portfolio

This portfolio aims to generate long-term capital growth and income. It holds about 35% stocks, 60% bonds, and some cash using:

  • CIBC Money Market Fund 3%
  • CIBC Canadian Short-Term Bond Index Fund 27%
  • CIBC Canadian Bond Index Fund 30%
  • CIBC Global Bond Index Fund 5%
  • CIBC Canadian Index Fund 10%
  • CIBC U.S. Index Fund 13%
  • CIBC European Index Fund 8%
  • CIBC Asia Pacific Index Fund 4%

The Invest Income Plus Portfolio has a 1.05% MER.

4. Simplii Invest Balanced Portfolio

A balanced fund offers a balance between stocks and fixed-income securities and is for investors looking to earn income and long-term growth using the power of equities. The funds that make up this portfolio are:

  • CIBC Canadian Short-Term Bond Index Fund 15%
  • CIBC Canadian Bond Index Fund 30%
  • CIBC Global Bond Index Fund 5%
  • CIBC Canadian Index Fund 16%
  • CIBC U.S. Index Fund 18%
  • CIBC European Index Fund 10%
  • CIBC Asia Pacific Index Fund 6%

Asset allocation in this portfolio is roughly 50% bonds and 50% stocks, and its MER is 1.09%.

5. Simplii Invest Balanced Growth Portfolio

This portfolio takes on more risk in exchange for capital growth and income. It has an MER of 1.11%, and asset allocation is 65% stocks and 35% bonds using:

  • CIBC Canadian Short-Term Bond Index Fund 5%
  • CIBC Canadian Bond Index Fund 25%
  • CIBC Global Bond Index Fund 5%
  • CIBC Canadian Index Fund 17%
  • CIBC U.S. Index Fund 23%
  • CIBC European Index Fund 13%
  • CIBC Asia Pacific Index Fund 8%
  • CIBC Emerging Markets Index Fund 4%

6. Simplii Invest Growth Portfolio

This portfolio’s asset allocation is weighted toward stocks at 80% and bonds at 20% using:

  • CIBC Canadian Bond Index Fund 15%
  • CIBC Global Bond Index Fund 5%
  • CIBC Canadian Index Fund 23%
  • CIBC U.S. Index Fund 28%
  • CIBC European Index Fund 15%
  • CIBC Asia Pacific Index Fund 10%
  • CIBC Emerging Markets Index Fund 4%

The Invest Growth Portfolio has an MER of 1.11%.

7. Simplii Invest Aggressive Growth Portfolio

This portfolio is focused on long-term growth through capital appreciation with 90% invested in stocks and 10% in bonds.

  • CIBC Canadian Bond Index Fund 10%
  • CIBC Canadian Index Fund 20%
  • CIBC U.S. Index Fund 32%
  • CIBC European Index Fund 20%
  • CIBC Asia Pacific Index Fund 12%
  • CIBC Emerging Markets Index Fund 6%

The Invest Aggressive Growth Portfolio has an MER of 1.12%.

If you are interested in the benchmark indexes that are being tracked by the individual funds, they are:

  • CIBC Canadian Short-Term Bond Index Fund: DEX Short-Term Bond Index
  • CIBC Canadian Bond Index Fund: DEX Universe Bond Index
  • CIBC Global Bond Index Fund: JP Morgan Global Government Bond Index (ex. Canada)
  • CIBC Canadian Index Fund: S&P/TSX Composite Index
  • CIBC U.S. Index Fund: S&P 500 Index Fund
  • CIBC European Index Fund: MSCI Europe Index
  • CIBC Asia Pacific Index Fund: MSCI All Country Pacific Index
  • CIBC Emerging Markets Index Fund: MSCI Emerging Markets Index

Simplii Mutual Fund Fees

When you buy one or a combination of these index mutual funds, you will pay an MER fee that comprises a management fee and other trading fees and commissions. For the available 7 portfolios at Simplii, the MER ranged from 0.95% to 1.12%.

Registered investment plans may also charge additional administration fees, withdrawal, transfer, and account closing fees. Simplii Financial customers (except for Quebec residents) get a fee rebate of 10% off the basic management fee.

Simplii Financial Investment Funds Review

Simplii Financial Mutual Funds – Pros and Cons

The advantages of using these index funds are:

  • Lower cost: Not as expensive as traditional mutual funds
  • Automatic re-balancing
  • Diversification
  • Low minimum investment requirement, and you can start with as little as $25 a month

The disadvantages are mostly related to a higher cost as compared to Robo-advisors or some other cheaper index funds (e.g. TD e-Series funds).

Simplii vs. Tangerine Index Mutual Funds

Simplii and Tangerine are both online-only banks. Simplii is owned by CIBC, while Tangerine is owned by Scotiabank. Tangerine offers 5 different core portfolios:

  • Tangerine Balanced Income Portfolio (INI210)
  • Tangerine Balanced Portfolio (INI220)
  • Tangerine Balanced Growth Portfolio (INI230)
  • Tangerine Equity Growth Portfolio (INI240)
  • Tangerine Dividend Portfolio (INI235)

Tangerine also offers three global ETF portfolios:

  • Tangerine Balanced ETF Portfolio (INI420)
  • Tangerine Balanced Growth ETF Portfolio (INI430)
  • Tangerine Equity Growth ETF Portfolio (INI440)

Both banks have similar MERs on their portfolios, with Tangerine at 1.06% and Simplii ranging from 0.95% to 1.12%. Compared to the TD e-Series index funds at 0.33% to 0.51%, Tangerine and Simplii funds are more expensive.

Investment Comparison: Simplii Index Funds vs. Robo-Advisors vs. Traditional Mutual Funds

Below I provide a quick overview of how investment costs compare when you invest with Simplii, robo-advisors, and traditional mutual funds.

Assuming your portfolio has $100,000 in assets:

  • Simplii Funds: @ 1.09% annual fee (MER of Balanced Portfolio) = $1,090 per year in fees.
  • Robo-Advisor, e.g. Wealthsimple: @ 0.65% annual fee (including ETF fees) = $650 per year in fees.
  • Traditional Mutual Funds: @ 1.98% annual fee for equity mutual funds = $1,980 per year in fees.

What is it with investment fees? Well, the fees you pay your fund manager and other costs (brokerage fees, commissions, etc.) add up and impact your portfolio performance over time.

When you purchase ETFs directly on an exchange, you could get them individually for as cheap as 0.06% (e.g. Vanguard FTSE Canada All Canada Index ETF).

Even better, you can avoid the hassle of rebalancing your portfolio 1-2x per year by purchasing an all-in asset allocation ETF (aka one-fund solutions) with a management fee as low as 0.18%, e.g. the iShares Core Balanced ETF Portfolio (XBAL).

Alternatively, with ETFs, you can let a robo-advisor do all the grunt work and pay them about 0.50% in management fees plus the cost of the underlying ETFs making up your portfolio.

If you are not comfortable trading ETFs directly and do not want to use a robo-advisor or are investing smaller amounts, index funds are a worthy alternative. An investor can purchase tailored index funds at an average cost of 1% or less.

Compared to the three options above, traditional equity mutual funds cost more at an average of 1.98%.

While active mutual fund managers want you to think you are paying for their ‘expertise’ in outperforming the markets and achieving stellar returns, historical data is not on their side. Active mutual funds rarely beat their benchmark indexes.

Wealthsimple Invest

On Wealthsimple’s Website

  • Fees: Managed investing service with fees of 0.5%
  • Account minimum: Start with the Basic Package with $1.00
  • Promotions: $25 when you open an account & deposit $500+
SNC Rating
4.5
  • Enjoy a fully managed investment service from Wealthsimple that utilizes a pre-built portfolio of low-cost ETFs.
  • Choose from three different tiers of investment strategies: conservative, balanced, or growth.
  • Begin investing with Wealthsimple Invest with an account balance as low as $1.00.
  • Management fees will depend on your total assets invested. For accounts of up to $100,000, the Basic fees are 0.5%, while accounts of more than $100,000 have fees of 0.4%.
  • Wealthsimple Invest will cover any transfer fees for account balances of over $5,000.
  • Wealthsimple Invest portfolio managers are available by phone during business hours or anytime via virtual live chat or email.
  • Use Wealthsimple’s mobile app to access any product within the Wealthsimple ecosystem, no matter where you are.
  • Looking for alternative investment strategies? Wealthsimple Invest offers both ESG and Halal investing as well.

Our Verdict

Wealthsimple Invest is one of several investment products from the Wealthsimple ecosystem. With relatively low management fees, Wealthsimple Invest professionally manages your portfolio, so you don’t have to. Enjoy having your money invested across a wide range of diversified assets with the goal of long-term capital growth.

Hassle-free, professionally managed investment portfolios

Relatively low management fees of up to 0.5%

No transfer fees for accounts of more than $5,000

Highly-rated mobile app

Three different tiers of investment strategies

You do not control which assets Wealthsimple Invest will invest in

No charting or advanced trading tools

Portfolio managers are only available during business hours

Management fees can be higher than just purchasing low-cost ETFs

Closing

Newbie investors may not be comfortable purchasing ETFs from an exchange and rebalancing their portfolios 1-2 times a year. This does not mean that you cannot cut your investment costs.

Take a closer look at index funds, Robo-advisors, or one-fund ETF solutions that can save you tons of money in the long run!

Related:

Simplii Financial Index Mutual Funds Review
Overall
4.5

Summary

This review of Simplii mutual funds covers the 7 different portfolios they offer, the index funds that make them up, and the associated fees (MER). Simplii Financial is the direct banking arm of CIBC and their mutual funds are actually selected from the stable of CIBC Securities Inc.

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Editorial Disclaimer: The investing information provided here is for informational purposes only and is not intended as individual investment advice or recommendation to invest in any specific security or investment product. Investors should always conduct their own independent research before making investment decisions or executing investment strategies. Savvy New Canadians does not offer advisory or brokerage services. Note that past investment performance does not guarantee future returns.

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Author

Gravatar for Enoch Omololu, MSc (Econ)
Enoch Omololu, MSc (Econ)

Enoch Omololu, personal finance expert, author, and founder of Savvy New Canadians, has written about money matters for over 10 years. Enoch has an MSc (Econ) degree in Finance and Investment Management from the University of Aberdeen Business School and has completed the Canadian Securities Course. His expertise has been highlighted in major publications like Forbes, Globe and Mail, Business Insider, CBC News, Toronto Star, Financial Post, CTV News, TD Direct Investing, Canadian Securities Exchange, and many others. Enoch is passionate about helping others win with their finances and recently created a practical investing course for beginners. You can read his full author bio.

About Savvy New Canadians

Savvy New Canadians is one of Canada's top personal finance platforms. Millions of Canadians use our site each year to learn how to save for retirement, invest smartly, maximize rewards, and earn extra cash. We have been featured in prominent finance media, including Forbes, Globe and Mail, Business Insider, CBC, MSN, Wealthsimple, and TD Direct Investing. Learn more about Savvy New Canadians.

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