Thinking of a high MER fund

[accountingsucks]

I know that we should stay away from high MER funds. I'm in Canada and need to top up my RSP this year by about 10K and am looking at the Sprott Canadian Equity fund. It gets a 5 star rating from MorningStar, but the MER last year was near 3%. It is performance based and last year they had around a 30% return and thus it was so high. The fund has averaged 29% since inception in 1997 so it is tempting even with the high MER. I don't really have any other high MER funds except in my company's RSP plan and our investment choices are very limited in that fund so I think being exposed to only one fund with a high MER might be OK. Thoughts?

Also for those U.S. readers, keep in mind that MER's up here in Canada are always much higher than in the U.S. A MER of around 3% in Canada is not that uncommon although still on the high side. Given their historical performance I am OK with the fee and the risk attached to the fund but was wondering what kind of lashing I would get for going with this fund.....

 

[soupcxan]

Isn't every mutual fund "performance based"?

 

[d]

I am OK with the fee

... mighty generous of you.

 

[Meadbh]

Don't do it! At least look at PH&N first.

 

[steinj]

Hi Accounting Sucks,

Sprott is an excellent mutual fund and one of the few whose MER varies based on the performance of the fund so if the fund does well the MER is higher and vice versa. The track record speaks for itself for over 10 years. This is one of the few funds that is worth the price if you want small caps/gold/metals and minerals. JoJo