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How much is a reasonable MER?
Old 04-08-2006, 05:53 PM   #1
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How much is a reasonable MER?

Here in Canada the expenses associated with a mutual fund are called an MER and are expressed as a percentage. I do not actually understand what the percentage is.

Anyways I am looking at investing through my bank and their MER's on their managed funds are around 2.5% and I have no idea if this is high or low.
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Re: How much is a reasonable MER?
Old 04-08-2006, 06:14 PM   #2
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Re: How much is a reasonable MER?

that would be many times the expense ratios of Vanguard funds, and about double more typcial expense ratios. while it varies depending on the type of fund, I generally think anything greater than 1% to be excessive.
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Re: How much is a reasonable MER?
Old 04-08-2006, 06:27 PM   #3
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Re: How much is a reasonable MER?

Yeah, 2.5% is outrageous. Look elsewhere. If nothing else, you could always opena brokerage account and buy ETFs, no?
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Re: How much is a reasonable MER?
Old 04-08-2006, 06:35 PM   #4
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Re: How much is a reasonable MER?

"The average Canadian MER is 2.1 percent, versus about 1.4 percent in the U.S. (Part of the explanation may be that Canadians invest proportionately more in global equity funds, and such fund carry higher expense ratios.). In Canada investors pay an average MER of 1.6% to buy a fund that tracks the S&P 500 index. In the United States, a similar fund is available with an MER as low as 0.2%, or one-eighth of the Canadian equivalent."
from http://www.fundalarm.com/arc0102b.htm
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Re: How much is a reasonable MER?
Old 04-08-2006, 06:47 PM   #5
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Re: How much is a reasonable MER?

But by paying the outrageous MER you are supporting Canadian investment bankers. Don't you believe they deserve parity with their Wall Street counterparts?

Fees should be minimized. That is the first rule.
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Re: How much is a reasonable MER?
Old 04-08-2006, 07:16 PM   #6
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Re: How much is a reasonable MER?

happened to come across more info ... see http://www.bylo.org/idxfunds.html for a listing of "low MER" index funds ... low, that is, by Canadian standards
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Re: How much is a reasonable MER?
Old 04-09-2006, 04:37 PM   #7
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Re: How much is a reasonable MER?

OK, given the higher MER's here in Canada, can someone recommend a decent mutual fund company to invest with? I don't want to be investing with 5 or 6 different fund companies at the same time. Looking at Altamira's site some of their funds MER's are approaching 3%. I guess I just don't know where to start at all.

Someone mentioned an ETF? What is that?
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Re: How much is a reasonable MER?
Old 04-09-2006, 04:44 PM   #8
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Re: How much is a reasonable MER?

ETF = exchange traded fund ... mostly (if not all) indexed, very low expense ratios, need to purchase though a brokerage so there is a brokerage fee, but if you purchase through a discount broker and in large amounts, it's cheap.
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Re: How much is a reasonable MER?
Old 04-22-2006, 12:45 PM   #9
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Re: How much is a reasonable MER?

The Canadian version of Morningstar http://www.morningstar.ca has a "Fund Selector" tool that lets you screen Canadian mutual funds based on a number of criteria, including expense ratio.

As a Canadian, you may also want to check out the Financial Webring Forum at http://www.financialwebring.com/forum/ . It will have much more information targeted at Canadian investors.
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