MER's question

[Spudd]

When a mutual fund holds other mutual funds, is the MER stated on the main fund including the MER's on the underlying?

As an example I was just looking at the TD Comfort Balanced Growth Portfolio:
https://research.tdwaterhouse.ca/res...ings/ca/TDB887

Its holdings seem to be entirely other TD mutual funds. If the main fund's MER is 2% and the underlying fund's MER's are (let's say) 1.5% each, are you actually paying 3.5%? Or is the main fund stated MER your net MER including the underlying?

(Before anyone asks, I'm not thinking of buying it, I'm just curious.)

[OhGreatGuru]

You would have to read the individual prospectus to find out. Generally speaking I think for the portfolio funds comprised of in-house mutual funds of the banks, the overall MER is all-inclusive. But if you have a portfolio fund composed of funds from different companies you may have to look more carefully, because the portfolio manager has little control over the MERs of the constituent funds. However, these types of portfolio funds tend to have higher MERs, so it may that they are including them.

[CanadianCapitalist]

For TD Wrap funds, the MER stated is inclusive of MERs charged by the underlying funds. This is especially true of ETFs. A number of Canadian ETFs hold US-listed ETFs. Example: XSP. The MER stated is inclusive of the MER of the US ETF it holds.

[Spudd]

That's good! At least it's not as bad as I first thought when I looked at it.

[Cal]

Related article on MER's:

http://michaeljamesmoney.blogspot.ca...ing-costs.html