How fees impact your investment returns

We compared four different types of Canadian equity funds

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From the February/March 2016 issue of the magazine.

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When it comes to your portfolio’s investment returns, fees matter—a lot. Below, we looked at 10-year returns for $10,000 invested in four different types of TD Canadian equity funds with varying fee structures (known as management expense ratios or MERs), assuming a 6% gross annual rate of return. So which one came out ahead? The low-fee, indexed ETF (MER of 0.05%) performed best, netting you $17,824. The worst? The high-fee, actively managed A-Series mutual fund (MER of 2.18%) netted just $14,548.

investment fees

Source: Jason Heath, Objective Financial Partners Inc.



One comment on “How fees impact your investment returns

  1. Silly article! You are assuming a 6 percent return for each investment vehicle. People seem to flock to the ETF because of the low fee. Do not base your investment strategy on only the fee! There are low cost Canadian Equity mutual funds out there that have hands down beat the Canadian ETF by several percentage points over a 10 and even 20 year period. Do your research and you will find them.


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