MER includes various trading costs. They are not charging you 1.6 percent, but the cost is 1.6 percent. Running an active EM fund is more difficult and expensive than running something in N America.
Not that I am advocating this fund but by Canadian standards it's not expensive for EM.
If you are being charged 1.6% the cost to you is 1.6% divided by your expected return. Slowly the sheep are starting to realize that even a fee like this is huge.
I'm hesitant to describe Mawer as a grifter -
true the company is in the business to make $, but for the most part their funds are more reasonable than most. Their Balanced fund costs less that 1% MER - which is close to some expensive ETF's.
I can't think of any US, Int'l or emerging Market Funds that charge less than 1.5%. I know that Mawer has it's research advisers posted in many different countries, it is likely that the fee is designed to support these teams - (as well as make a profit)
I understand these guys have expenses-but to you that should be irrelevant-the bottom line is over the long term are you confident they are going to get you more than 1.6% every year, year in year out, then you will get yourself.
Mawer's TERs are posted on the main web page for each fund, in a line after MER. Most of them are well under 0.1%. TER for this fund is not listed, probably because it is new.
the honourable member was talking about MERs & trading costs in general. Everyone knows that "trading costs" are commission costs, which are not included. In the context, the statement was a bit misleading.
What I do like about MAW is how they stop accepting contributions once a fund reaches certain size. That shows integrity, although there has to be an element of marketing there too. And their costs compare favourably to the racket offered by the big five. Either way, it benefits investors.
Still, I don't hold any MAW funds as this wouldn't align with my investment policy.
Just a note that if you hold mawer international equity it already holds 15% emerging markets. I was surprised this was the case and obviously didn't do my homework before buying it.
** Mawer International Equity Benchmark History:
Jan 1988: MSCI EAFE (net)
Oct 2016: MSCI ACWI ex-USA (net)
Rationale for Change: MSCI ACWI (net) excluding US Index is a better representation of the mandate in our opinion. For example, the past benchmark does not include Emerging Markets whereas the fund has holdings in these markets consistent with its prospectus and investment policy statement.
Dubmac, not sure if you are thinking the Int fund held 15% in MAW160 or some other emerging mkts fund but that is not the case. The positions were held as individual companies, and MAW160 is a new fund as OP noted.
I wouldn't be surprised though to see funds like 102, 104, begin to use MAW160 for their emerging mkt coverage.
James, MAW104 of course has its own benchark which is: 5% FTSE TMX 91 Day T-Bill Index, 5% Citi World Government Bond Index, 30% FTSE TMX Canada Universe Bond Index, 15% S&P/TSX Composite Index, 15% S&P 500 Index (CAD), 15% MSCI EAFE Index (Net, CAD), 7.5% BMO Small Cap Index (Blended, Weighted) and 7.5% Russell Global Small Cap Index (Gross, CAD) . They acknowledge that they don't try to replicate the holdings of this benchmark, and that they underperformed it last year at 3.2% vs 7.4%.
thanks...I didn't know this either - but it makes sense & is consistent with what I have seen when I check their holdings in each equity fund - which I do periodically. I have never seen their equity funds hold other funds or ETF's - only companies and some cash
If the Mawer International Equity Fund or Mawer Global Small Cap Fund are any indication, they both handily beat their respective indexes over almost all time periods with lower betas. Mawer International Equity has a 5 year return of 13.21% and a 10 year return of 4.42% versus 13.08% and 2.67% for the index.
Mawer Global Small Cap has a 5 year return of 22.3% (no 10 year available) versus 11.97% for the index.
I still own the indexes as well but there could be an argument that good mutual funds can add value - particular in the small cap and emerging market categories.
I am trying to invest in this fund through a TD direct account. I am not able to access in this fund...but all the other Mawer funds are available through them. Anyone encountering this?
I have a self directed account through TD and have not been able to buy this fund. I called up TD and the representative said it was not available...which seems odd since all the other Mawer funds are available. Anyone else encountering this with TD?
As I have not invested in any International , asian or Emerging markets since I dumped a Financial Advisor who had us in those funds, which never made money, I may not be one to comment. But I'd say stick to Cdn & US. At least one knows what one is buying.
caltran..I would bet that MAW160..even with its MER of 1.6..will outperform ZEM by several percentage points. Don't believe me? Then just monitor the fund for the next 5 years and watch MAWER's investing strategy at work.
There are some good mutual funds out there, and they can perform well even with high MERs.
One example that comes to mind is Beutel Goodman Small Cap (1.49% MER). Its 5 year performance is 9.68% per year. Compare that to the low fee index ETF, iShares XCS, which only returned 2.31%. No contest! I bring up this example because Canadian small caps are another specialized area where a good manager adds value.
Straying off topic, but the 15 year performance of Beutel Goodman Small Cap is a whopping 10.23% per year. The only thing that repelled me from this fund was the front end load (or is it another load)? Those confuse the heck out of me. It might still be worth holding despite that.
So did more digging, is there an ETF that tracks the Citi World Government Bond Index. This seems to be the curative for dropping stock markets - it made almost 40% in 2008!
Yeah, Beutel Small Cap caught my eye too. I am buying it through work at 0.4% MER and no loading. I'd like to have 20 to 30% of Canadian allocation in small caps and this is one case when I prefer a mutual fund to a tracker. Of course past overperformance might not extend into the future.
Interesting. Is that a special arrangement through your work? I am interested in buying this through TDDI or Scotia iTrade ... any idea how that would work? It seems that the MER would be higher, at 1.49%, and I can't figure out the story with the loads. It sounds like any time I add new money into the fund, there would be a fee taken off that (front load).
Pretty hard to ignore a fund that works in a specialized space like this, with 13.3% annual return since inception in 1995. This is significantly higher than the Canadian index. Could the fund managers really be this good? 22 year history can't be an anomaly.
Yes, it's a registered pension plan through work. Large companies set up deals with various funds and negotiate lower MERs. The selection isn't all that great but Beutel small cap was something I fancied anyway.
I can see that a good manager can add a lot of value to a Canadian small cap fund. It's a bit of a sandpit... The usual problem with mutual funds is that eventually the brains behind success leave or the fund grows too popular and large to add any alpha.
When I look at my account in TDDI it shows Beutel Goodman Small Cap as no load.
It may be worth calling them to check though. I know TDDI sells Mawer as no load, but I recall the minimum to buy was $5k and also they had a short-term redemption fee. BG funds may have something similar.
Great Laker: I have an TTDI and have not been able to buy the MAW160 (their new Emerging Market Fund). It allows me to buy all their other Mawer funds except for this one.
Probably will show up eventually. It just showed up on Google Finance last week.
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