$321,000 lost to fees
All mutual funds charge an MER (Management Expense Ratio) fee. In Canada the average MER is 2.2%, Canadians pay among the highest mutual funds fees in the world.
Most mutual fund holders are not aware of the MER, the MER is deducted at the source from the mutual fund company. For example when you receive your mutual fund statement at the end of the year it may state that your investments increased by 4.5% , however your actual performance was 6.7% and the mutual fund company deducted the 2.2% fee from your return.
The MER fee may not sound like much but as you can see over time the fees will add up to thousands of dollars.
How to eliminate the MER fee?
Eliminating the MER fee is simple....avoid mutual funds. A solid portfolio built upon the principles of value investing will ensure that you never pay extra fees.