Whatever you’re paying, there’s a good chance it’s too much. Morningstar’s 2015 Global Fund Investor Experience Study assessed Canada with a “D minus” grade in the fees and expenses category. Although that’s an improvement over our previous “F” grade, we’re still the worst of the bunch compared to the other 24 countries in the study. Canada’s median asset-weighted expense ratio for equity mutual funds is 2.35%, a far cry from the many sub-0.1% fee exchange-traded fund options available for North American equity investors. It’s why you should really take some time to make sure you’re getting the best fee available. Assuming your mutual fund and ETF investments are earning identical market returns, saving 2% per year in fees could make a huge difference over an extended period. Case in point: Just a couple of percentage points on a $100,000 investment could mean the difference between having $760,000 or $1.3 million portfolio after 30 years. Take a look: Over 30 years, you’d have earned $565,542 more!
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