heredago's blog

June 11, 2011

RFD eFunds to ETF couch potato couchpotato

Filed under: Uncategorized — heredago @ 18:05
[QUOTE=S5;13009957]Assuming you have 100k in e-series you are only paying about $420 in MERs per year vs about $2500 if you had the average mix of retail mutual funds. It's hard to make major improvements on something as good as e-series. You should look at Vanguard's ETFs for low fees, exceptional tracking errors(often below their MERs!) and great tax efficiency. You'll need to convert CAD to USD but that need not cost much these days with either Norbert's gambit or using these new Horizon  currency ETFs. [url][/url]

Other than for Canadian content, it's best to avoid all Canuck ETFs if you want to save on fees. You should concentrate on comparing each asset class separately rather than just looking at the overall portfolio MERs on that CCP page. Your EAFE e-fund is running you 0.50% vs 0.12% for the corresponding VEA. Your US e-fund costs you 0.34% and only holds 500 stocks vs 0.07% for VTI which holds over 3300. You can also gain access to emerging markets which you couldn't do with e-series, VWO costs just 0.22%.

So basically you've figured out that switching to portfolio #1 from e-series is a massive waste of time($50 a year but likely breakeven or so after commissions). Consider portfolios #2, #4 or a combination of both to save more fees and make the ETF switch worthwhile.

$10 is what most of us who don't want to deal with Questrade pay. You can cut in half if you are willing to deal with problems.[/QUOTE]

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