Index funds vs ETFs
moneyrelations :: Jul.23.2007
Hello, stranger! New here? How about subscribing to my RSS feed? Thanks for visiting!
When I first started investing, it was just about getting into the “game”. Sure, my first mutual funds were not the highest rated or had the lowest MERs but at the very least, they got me curious enough to track their performance. I guess it’s like the NHL playoffs, I’m only interested if my team is still in it.
Now that I know more, I am looking into maximizing my returns by first lowering the cost of owning mutual funds. I discussed the idea of moving my index funds to equivalent ETF versions before. Let’s see if it’s worth it. Excuse me while I talk myself through this… Tables are always good 
| TD e-funds | MER % | iShares Canada | MER % | Difference % |
| Canadian Index - e | 0.31 | XIC | 0.25 | 0.06 |
| US Index -e | 0.33 | XSP | 0.24 | 0.09 |
| International -e | 0.48 | XIN | 0.50 | (0.02) |
| Canadian Bond Index -e | 0.48 | XBB | 0.30 | 0.18 |
By my questionable calculations, a proposed 100k portfolio with an even 4-way allocation split would generate $77.5 in savings. Yearly rebalancing with new investment dollars saved up would cost $39.99 at the most with $9.99 per transaction.
I know I can get a cheaper and broader selection of ETFs with America’s Vanguard for my foreign component and also add emerging market into the mix as a replacement to my TD Latin American fund. However, this would require US currency conversion and dealing with foreign income. I guess that’s my next step in my learning process - tackling foreign equities in a cost effective way.
Investing ::
No Comments »
Did you enjoy the post?
Subscribe to Money Relations and the Comments as well.
Share in Social Media
Related Posts:
