1 / 13

Understanding Management Expense Ratios (MERs) in Canadian Investment Funds

This document explores Management Expense Ratios (MERs) and their implications for investors in Canadian investment funds. It defines MERs as the annual costs associated with fund management, advisory, and administrative services, expressed as a percentage of the fund's average net asset value. Key factors influencing MERs, including fund type and advisory costs, are discussed, alongside considerations of whether MERs are excessive compared to other investment options. The guide aims to empower investors with a comprehensive understanding of their total ownership costs.

lionel
Download Presentation

Understanding Management Expense Ratios (MERs) in Canadian Investment Funds

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Understanding MERs 2011

  2. The Investment Funds Institute of Canada Contents • What is an MER? • What Does the MER Pay For? • What Determines How Much I Pay? • Are MERs Too High? 2

  3. The Investment Funds Institute of Canada What is an MER? • payment made by the fund (and by extension the unitholders of the fund) to the fund company for the management, advisory, administrative and other services that it provides on an annual basis. • expressed as a percentage of the average net asset value of the fund. • definition, calculation and presentation mandated by securities law in National Instruments 81-101 and 81-106. 3

  4. The Investment Funds Institute of Canada What does the MER Pay for? 4

  5. The Investment Funds Institute of Canada What determines how much I pay? Type of Fund 5

  6. The Investment Funds Institute of Canada What determines how much I pay? Do I use Advice? 6

  7. The Investment Funds Institute of Canada What determines how much I pay? • If I use Advice, How is the Advisor Compensated? • typical annual trailer fees paid to the dealer/advisor: • A commission can be charged under the SC option but in 90% or more of these trades the commission is waived by the advisor. 7

  8. The Investment Funds Institute of Canada What determines how much I pay? What is my Total Cost of Ownership? 8

  9. The Investment Funds Institute of Canada Are MERs Too High? Relative to other Registered Savings Plans? 9

  10. The Investment Funds Institute of Canada Are MERs Too High? Relative to MERs paid in the US? 10

  11. The Investment Funds Institute of Canada Are MERs Too High? Cost of Ownership for front load advisor sold mutual funds by manager ($0-100K account size) 11

  12. The Investment Funds Institute of Canada Are MERs Too High? 12

More Related