MER , Management Fees , Trailer Fees

[Shakespeare]

Buying XWD in a registered account avoids foreign exchange charges, which, depending upon holding period, can add significantly to the cost.

[newguy]

So I'd expect a slightly smaller dividend and that's how the slightly smaller total return would be achieved.

Also this fund loses it's US domicile I assume. This means witholding tax on dividends inside a rrsp. That's not a reason fro reprortinga lower dividend though.

newguy

[tidal]

just linking...

Short-term redemption fees protect and boost returns for long-term mutual fund investors.

Wait … what? A penalty fee that can actually make you money?

Short-term redemption fees could boost returns for mutual fund investors by as much as 3.27 percent a year, according to researchers in Texas Tech University’s Division of Personal Financial Planning.

The three authors of Redemption Fees: Reward for Punishment, presented at the 2010 Morningstar Ibbotson Conference in Orlando, Fla., found that fees that penalize investors for selling a fund before a certain period of time discourage investors from trading in and out of mutual funds, protecting long-term investors.

[George$]

An interesting comment in the May 7 NY Times that brings back a similar recollection:
That Nagging Question of Mutual Fund Fees

PAUL SAMUELSON, the late Nobel laureate in economics, compared mutual funds to a saloon “I decided that there was only one place to make money in the mutual fund business, as there is only one place for a temperate man to be in a saloon: behind the bar and not in front of it,” he told Congress in 1967. It made sense to invest in mutual fund companies, Mr. Samuelson said, but not in mutual funds.

In the early 1980's I attended a Sceptre annual meeting - as I owned some of Allan Jacobs' mutual funds. In the question period I naively asked: "Am I better off owning shares in Scepre or in owning the mutual funds Sceptre manages?" - silence and they moved on to the next question.

[NormR]

In the early 1980's I attended a Sceptre annual meeting - as I owned some of Allan Jacobs' mutual funds. In the question period I naively asked: "Am I better off owning shares in Scepre or in owning the mutual funds Sceptre manages?" - silence and they moved on to the next question.

So, now that time has passed, which was it? Did the fund stock win or did the fund win?

[George$]

In the early 1980's I attended a Sceptre annual meeting - as I owned some of Allan Jacobs' mutual funds. In the question period I naively asked: "Am I better off owning shares in Scepre or in owning the mutual funds Sceptre manages?" - silence and they moved on to the next question.

So, now that time has passed, which was it? Did the fund stock win or did the fund win?

I dunno Norm. Too many changes while I just watched. After that meeting I believe I watched Sceptre outperform the mutual funds I held. But then I left Sceptre and went to lower cost index funds. Doug Grant retired from Sceptre. I lost touch. Jacobs more recently jumped ship to Sprott. I haven't checked on Sceptre - but I would not be surprised that they are losing market share these days.

My impression is that the high point of money managers and easy money is now past. (The sign of the second derivative may have changed? )

So when is is NormR Inc having its IPO?

[NormR]

So when is is NormR Inc having its IPO?

Perhaps I can interest you in some non-voting non-dividend paying shares?

[skepticus]

I haven't come across any reaction on WRF to this :

BlackRock Raises iShares Management Fees by 5%

(http://michaeljamesmoney.blogspot.com/2 ... ement.html)

What does this say about the wisdom of forsaking mutual funds and their higher fees, for ETFs?

[Bylo Selhi]

What does this say about the wisdom of forsaking mutual funds and their higher fees, for ETFs?

At least two things:
1. Caveat emptor: Guess what? Fund/ETF sponsors can raise (or lower) their MERs, usually without first getting unitholder approval.
2. ETFs continue to have a substantial cost advantage over high MER open-end mutual funds. A 5% MER increase on a 2.5% MER mutual fund will cost you at least 5x as much as on a <0.5% MER ETF.

[queerasmoi]

I nearly jumped out of my seat when I read 5% increase... until I realized it meant 5% of existing fees, not 500 bp

[adrian2]

I haven't come across any reaction on WRF to this :

BlackRock Raises iShares Management Fees by 5%

(http://michaeljamesmoney.blogspot.com/2 ... ement.html)

Actually, Blackrock is not touching the management fee. According to the Notice to unitholders, they are "bring it in line with industry practice" by no longer paying the GST out of their pockets.

If I may speculate, this is related with the upcoming HST introduction. Maybe they were reluctantly OK with paying 5%, but they drew a line in the sand before paying 13%.