Choosing Manulife ILP Funds for a friend with Manulife ILP Plan

One of the books I read early in my investment journey was the Passive Strategy of Index Investing "The Little Book of Common Sense Investing" by John C. Bogle, and he has now a following which the group is named "Bogleheads".

A friend who looked me up regarding a fund switching that was advised by her Financial Advisor.

So I went to have a look.

The initial funds are:

• Manulife Income Series - Global Asset Allocation Growth Fund
• Manulife Asian Small Cap Equity Fund

So the plan is Manulife ILP plan with a focus on investing, with no protection clause in it.

She's currently not interested in exiting this plan and manually going about it using low cost ETFs.

So let's see what we can do here.

I previously did allocate my own Manulife ILP Funds previously here. But her profile requirements differs from mine, thus allocation would be different as well.

I am also looking to simplify the number of funds inside the plan, so after looking through the various plans here, I decided on the Two Fund Portfolio style but using ILP Funds instead of ETFs.

Why the Two Fund Portfolio over the Three Fund Portfolio or even the slice and dice variant is because I can't get a pure US fund (I would think US has much more growth than SG, frankly) from that list, nor any sector focus ones, the best I can do is the Two Fund Portfolio due to the limited selection ^^" (plus these funds really have a high expense ratio =\).

A Three Fund Portfolio would consist of:

• Total Stock Market Index (42%)
• International Stock Market Index Fund (18%)
• International Bond Index Fund (40%)

However, since we can't get a pure US Index like fund, so the Two Fund Portfolio would consist of:

• International Stock Market Index Fund
• International Bond Index Fund

I am following the recommended 60:40 allocation as well.


Thus, the Two Fund Portfolio as selected is:

• Golden Worldwide Equity Fund (60%)
• Golden International Bond Fund (40%)

That being said, I did consider the Golden Global Balanced Fund that allocates the same way as what I suggested above, yet for some reason, as it is a fund investing into 2 of the funds above, the expense ratio seems to be even higher than the two above ones added together =\

After this allocation, can look forward to rebalancing annually via Manulife Automatic Rebalancing Option should one outperforms the other to maintain the 60:40 allocation.

Hope this helped her in her decision regarding the funds selection.

EDIT (15Apr18): After discussion with her:

A Three Fund Portfolio was selected as:

• Golden Regional China Fund (42%)
• Golden Worldwide Equity Fund (18%)
• Golden International Bond Fund (30%)

She is looking at a 60:40 equity-bond allocation as well.

Reason for the choices are because China is growing (vs Singapore, and since there's no US), but could be balanced out by Worldwide Equity (45% US, 30% UK, 7% JP, 5% HK) and International Bonds. I left out India because Morningstar ratings are rather poor. Worldwide Equity for long term performance seems to underperform the benchmark somewhat, but I can't find another better fund within the options.

That being said, I wonder if I should terminate my Manulife ILP moving forward and divert the funds towards my own main equity portfolio as the ILP is underperforming my own investing.