Alternatives to OMERS AVC

You cannot dispute the convenience and cost efficiency associated with OMERS Additional Voluntary Contributions (AVCs).  Automatic deductions from payroll are great.  The low fees of around 0.5% put any mutual fund fees to shame (often over 2%, even for your fixed income assets).

With OMERS 2013 net returns of 6%, you could wonder if you could do just as well with your own investments.  We did!  We have been thoroughly pleased with private REIT investments over the past several years that have returns competitive with OMERS (and that did not have the shock of the public market crash).

One is Centurion Apartment REIT, which per their web site "is an unincorporated open-end investment trust with the objectives of:

1) providing investors with stable and growing cash distributions, payable monthly and, to the extent reasonably possible, tax deferred, from investments in a diversified portfolio of income-producing multi-unit residential properties located in Canada and

2) maximizing REIT Unit value through the ongoing management of  Centurion Apartment REIT's assets and through the future acquisition of additional multi-unit residential properties"

This compares Centurion Apartment REIT returns to public markets (that have pushed down OMERS returns) and public REITs.  Centurion returns over 7% and offers appreciation potential as well. To hold inside your RRSP, as an alternative to OMERS AVCs, you need is a self directed plan such as from Olympia Trust, and you'll need to be an accredited investor in most cases.

Skyline Apartment REIT has similarly been a great alternative to AVCs.  It now returns 7.4% per year, just had a 1.9% capital appreciation this month, and has had capital appreciation of 35% (in addition to steady annual returns) since 2006!