Want a chance at improving your clients’ returns by 2 percentage points without losing diversification? The razor-thin MERs of ETFs will let your clients keep more of their returns.

Compare the MER of the median Canadian Large Cap fund (2.63%) to an ETF that tracks the S&P/TSX 60 Index (0.17%). That’s a 246 basis point difference, which left alone has a devastating effect on your clients’ returns.

See link below: What Funds Keep (source: www.stingyinvestor.com)

Even a typical F class fund leaves a giant gouge in your clients’ returns.

See link below: F-Class Shares vs ETFs

As returns shrink and clients become increasingly sophisticated, the corrosive effects of high MERs will figure more prominently in your clients’ investment decisions. Be ahead of the game by using low-cost ETFs, especially in markets where mutual fund managers seldom beat the index. (Most mutual fund managers fail to best their benchmarks.) Your clients may be happy to split the MER savings with you, making your transition to a fee-based relationship all that easier, too.

To see how MERs affect returns, go to the mutual fund fee calculator at www.osc.gov.on.ca/en/Investor/Tools/Mutual/ca01454e.htm, or visit the MER impact calculator at www.iunits.com.

Sponsored by Barclays Global Investors Canada Limited.
Contact Howard Atkinson at howard.atkinson@barclaysglobal.com

The rate of return is used only to illustrate the effects of the compound growth rate and is not intended to reflect future values of the mutual fund or returns on investment in the mutual fund.

Commissions, management fees and expenses all may be associated with iUnits. Please read the relevant prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.