Jim Letourneau's Blog

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ETFs, Mutual Funds and Expenses

One of the newer options available to investors is the broad spectrum of Exchange Traded Funds (commonly known as ETFs). Canadians have been waking up to the benefits of ETFs as evidenced by the following:

Canadians invested more dollars in iShares Exchange Traded Funds (ETFs) in 2008 than in all mutual fund providers.

With lower management expense ratios than mutual funds (the average Canadian equity mutual fund has an MER of 2.5%; ETF MERs average 0.3%), ETFs make room for stronger returns and greater transparency. ETFs also provide greater tax efficiency and liquidity across all major asset classes.

We'll be writing more on ETFs in the coming weeks.