# Your portfolio weighted-average MER



## larry81 (Nov 22, 2010)

I am a cheapskate, since i can't control markets performance, i control what i can, costs !

I am proud to say that my portfolio weighted-average MER is *0.12%*

My funds are:

25% VTI - Vanguard Total Stock Market ETF (0.05% MER)
25% VXUS - Vanguard Total International Stock ETF (0.14% MER)
25% VCE - Vanguard FTSE Canada Index ETF (0.10% MER)
20% HBB - Horizons CDN Select Universe Bond ETF (0.15% MER + 0.15% Swap fee) + some individual bonds
5% ZRE - BMO Equal Weight REITs Index ETF (0.55% MER)

My most expensive fund is ZRE at 0.55% !

What about you folks ? Go to the following URL for a calculator and post your results !

http://www.squawkfox.com/tools/portfolio_mer_calculator/


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## Spudd (Oct 11, 2011)

Mine is 0.12 also (0.1228 if you want to get specific). 

My most expensive is VRE at 0.39%. I wonder why REIT funds are so pricey.


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## lonewolf (Jun 12, 2012)

Larry

Vanguard I have heard is one of the best, the owner of the funds are the investors of the fund, Which results in the low fees. Are you able to trade them commission free in Canada ? The experts like Suzzy Orman always recommend Vangaurd


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## larry81 (Nov 22, 2010)

lonewolf said:


> Larry
> 
> Vanguard I have heard is one of the best, the owner of the funds are the investors of the fund, Which results in the low fees. Are you able to trade them commission free in Canada ? The experts like Suzzy Orman always recommend Vangaurd


Some Canadian brokerage offer free trading for ETF:
http://www.milliondollarjourney.com/top-canadian-discount-brokerages-with-commission-free-etfs.htm

I am with the old green (TD) so i still pay 9.99$ per trade. I only perform about 25 buy operation a year.


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## larry81 (Nov 22, 2010)

Spudd said:


> Mine is 0.12 also (0.1228 if you want to get specific).
> 
> My most expensive is VRE at 0.39%. I wonder why REIT funds are so pricey.


Good stuff Spudd ! Post your portfolio please


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## Synergy (Mar 18, 2013)

Do you not include your transaction fees into your overall portfolio expense ratio?

All-in I'm on track for approximately 0.10% if the second 1/2 of the year mirrors the first 1/2. Granted I'm currently holding all individual stocks. I sold all my index funds in 2013.


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## My Own Advisor (Sep 24, 2012)

I pay 0.05% for VTI.
I pay 0.14% for VXUS.
I pay 0.18% for XIU.

I own a bunch 30-40 individual stocks that cost about $150 per year to buy more of them during the year.


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## Soon Forget (Mar 25, 2014)

I'm waiting for Vangaurd's new World ex-Canada ETF to begin trading so I can consolidate my international holdings. Then I plan on:

47% World ex-Canada (MER = 0.25)
23% VCN (MER = 0.12)
30% VAB (MER = 0.20)

Weighted average = 0.205

I trust each of these will drop by a few points once Vanguard's Canadian presence picks up. VCN probably first since XIC & ZCN are now at 0.05.


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## Spudd (Oct 11, 2011)

Here's my portfolio:
CLF (laddered bond fund) - 15.5% 0.17
VAB - 4.3% 0.23
VRE 7.8% 0.39
VNQ 8.8% 0.1
XIC 13.4% 0.05
VEU 20.5% 0.15
VTI 19.8% 0.05
cash & individual stocks 10% 0

And I'm with TD too, so 9.99 per transaction. But that's hard to quantify. It's only a few trades a year so it should be low.


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## marina628 (Dec 14, 2010)

Here is what we pay on the mutual fund portion of our portfolio with TD: 
TDB645 2.82
TDB976 2.82
tdb906 .51
tdb911 .51
tdb908 .51
tdb902 .35


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## protomok (Jul 9, 2012)

Here is what we pay for our various TD e-series funds:
Fund | % of Portfolio | MER / Fee
TDB8150 (savings acct) | 31.1 | 0
TDB900 | 26.4 | 0.33
TDB902 | 26.3 | 0.35
TDB911 | 12.9 | 0.51

*Avg Fee: 0.24%*

Also I'm curious, has anyone found a discount broker that truly has no ETF commissions? It seems that the brokerages that offer $0 ETF commissions all have a catch. For example Questrade still charges a fee for the sale of the ETF, Qtrade requires a minimum $1000 purchase to avoid the commission, others charge an annual fee, etc.


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## Soon Forget (Mar 25, 2014)

protomok: getting off topic here, but I see you are holding the Fixed Income part of your portfolio as cash (HISA) and not bonds. What's your plan for when to enter the bond market with this? ie. some market-timing happening here in anticipation of an interest rate increase.

Full disclosure: I currently have my FI split ~50/50 between a short-term bond fund and HISA, although in the next few months I was planning on switching it all to an intermediate-term fund (VAB) to go along with the principle of no market timing.


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## james4beach (Nov 15, 2012)

larry81 said:


> 5% ZRE - BMO Equal Weight REITs Index ETF (0.55% MER)


That's not the MER. It's the max management fee. I believe the MER is that plus HST which is 0.62% MER

Gotta watch out for this. Some ETF providers mention MER, others are showing the mgmt fee but not showing the MER.


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## larry81 (Nov 22, 2010)

james4beach said:


> That's not the MER. It's the max management fee. I believe the MER is that plus HST which is 0.62% MER
> 
> Gotta watch out for this. Some ETF providers mention MER, others are showing the mgmt fee but not showing the MER.


You are right James, 0.62% !!! Thanks for the catch !

I have about 40k in this ETF (filled my TFSA), i am pondering the idea to to unbundle my holding and hold REIT individually...

I should probably update my IPS to forbid any purchase of funds with >0.50% MER.


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## larry81 (Nov 22, 2010)

Synergy said:


> Do you not include your transaction fees into your overall portfolio expense ratio?


Since my trading activity is minimal, i don't include it in my expense ratio.


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## protomok (Jul 9, 2012)

Soon Forget said:


> protomok: getting off topic here, but I see you are holding the Fixed Income part of your portfolio as cash (HISA) and not bonds. What's your plan for when to enter the bond market with this? ie. some market-timing happening here in anticipation of an interest rate increase.


I'm not sure yet. I want to just put the entire FI portion in a DEX Universe bond fund and stop trying to time the market but it's hard to ignore the rate situation right now  Although I like the idea of doing a 50/50 HISA / bond split.


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## larry81 (Nov 22, 2010)

protomok said:


> I'm not sure yet. I want to just put the entire FI portion in a DEX Universe bond fund and stop trying to time the market but it's hard to ignore the rate situation right now  Although I like the idea of doing a 50/50 HISA / bond split.


If you plan to hold your bonds to maturity, there is absolutely no reason to try to "time" your bond portion entry.

Some reading for you:

http://canadiancouchpotato.com/2013/09/16/ask-the-spud-should-i-fear-rising-interest-rates/
http://canadiancouchpotato.com/2011/07/07/holding-your-bond-fund-for-the-duration/


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## protomok (Jul 9, 2012)

Hi Larry,

Thanks for the links. I'd definitely prefer to hold individual bonds right now but unfortunately my portfolio size does not allow me to properly diversify individual bond holdings.

So I'm watching the Bond Funds and Bond ETFs, but my concern is that the Bond Funds/ETFs don't hold their bonds until maturity (with the possible exception of short term bond funds) and I see a very high probability of a loss over the next couple years once rates slowly start to rise (as indicated by the Fed).

Is there such a thing a medium term bond fund that holds all bonds until maturity? I believe such a fund would never return a loss if I understand this correctly?

Thanks


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## larry81 (Nov 22, 2010)

protomok i am not aware of such fund.

It seem like you want to 'time' your entry into bonds. I dont believe this strategy will work. When you say: "once rates slowly start to rise (as indicated by the Fed)". FYI, people have been 'preparing' for rates hike since... 2010 and Anyone holding cash instead of bonds would had absorbed the opportunity cost of 3-4-5% depending of the desired fixed income.

Focus on Time in the Market, Not Market Timing


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## AltaRed (Jun 8, 2009)

protomok said:


> Is there such a thing a medium term bond fund that holds all bonds until maturity? I believe such a fund would never return a loss if I understand this correctly?


Neither do I, but because bond funds must generally purchase their bonds >$100, i.e. premium bonds, over the last 5+ years, there would be a capital loss every time a bond matures. That can be seen by comparing current yield of the bond fund with its yield to maturity. As long as the former is higher than the latter, the fund in aggregate is taking capital losses no matter when they sell their bonds. 

P.S. I do not know the practices of specific bond ETFs or funds, but I understand they typically sell their bonds when maturity is less than a year away (the value of that < 1 yr bond is approaching $100 par value anyway).


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## larry81 (Nov 22, 2010)

re: BMO Discount Bond Index ETF (ZDB) to avoid the "premium bonds" problem
http://www.etfs.bmo.com/bmo-etfs/glance?fundId=97632


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## AltaRed (Jun 8, 2009)

Yeah, but a current yield (2.41%) and YTM (2.43%) less MER of 0.2%, and a duration of 7.06 years..... is a dismal return.


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## larry81 (Nov 22, 2010)

So, any of you cheapskate managed to achieve a <0.10% average MER ?


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## BoringInvestor (Sep 12, 2013)

0.21% for my boring portfolio.

http://canadianmoneyforum.com/showthread.php/16247-Couch-potato-lazy-portfolio-tracking-my-progress


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## protomok (Jul 9, 2012)

larry81 said:


> protomok i am not aware of such fund.
> 
> It seem like you want to 'time' your entry into bonds. I dont believe this strategy will work. When you say: "once rates slowly start to rise (as indicated by the Fed)". FYI, people have been 'preparing' for rates hike since... 2010 and Anyone holding cash instead of bonds would had absorbed the opportunity cost of 3-4-5% depending of the desired fixed income.
> 
> Focus on Time in the Market, Not Market Timing


Thanks Larry. Yes, I am a couch potato investor getting cold feet about these bonds  But I agree, market timing really has no place in a long term (>20 or 30 years), couch potato style portfolio.

So if I understand correctly, as long as I hold a bond fund for longer than the weighted average duration I will get a positive total return even if some years are negative? I plan to hold my FI portion for > 20 years...most of it is in RRSP so I think it'll be OK.

I'm going to take the plunge and pick up some XBB, or a comparable bond fund and just ignore the short term results. If I'm going to do this couch potato strategy I might as well be consistent


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## hboy43 (May 10, 2009)

larry81 said:


> So, any of you cheapskate managed to achieve a <0.10% average MER ?


Yes, I am under that. Whatever my wife's Royal bank MER fees on ~77K plus 3-6 trades/year @ $10/trade + maybe an RRSP partial withdrawl fee of $25 should get us in the 0.09 range assuming 2% on the Royal bank stuff.

Some year I must encourage my wife to ditch the funds.

hboy43


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## Ihatetaxes (May 5, 2010)

Total Portfolio 0.1324% 

1 XIC .05 30% 
2 VTI .05 25% 
3 XRE .60 5%
4 XSB .28 5%
5 DEM .63 7% 
6 VWO .15 7%
7 VEA .09 7% 
8 GICS 0 14%

Thanks for the thread Larry.


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## Ihatetaxes (May 5, 2010)

larry81 said:


> I have about 40k in this ETF (filled my TFSA), i am pondering the idea to to unbundle my holding and hold REIT individually...


Just did the opposite and went from 10% portfolio in REI.UN (after a great run) to 5% portfolio XRE. Since I own some commercial real estate plus a US rental vacation home and a paid for principle residence I have too much in RE already.


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## cannew (Jun 19, 2011)

larry81 said:


> I am a cheapskate, since i can't control markets performance, i control what i can, costs !
> 
> I am proud to say that my portfolio weighted-average MER is *0.12%*
> 
> ...


If you were truly a cheapskate, you would have a ZERO mer! Why would anyone want to buy an etf which holds 65 or 75 stocks, many of which might not be quality stocks. Even a 0.12% mer (plus mgt fee), charged every year to your account, can amount to thousands of dollars.


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## Ihatetaxes (May 5, 2010)

cannew said:


> If you were truly a cheapskate, you would have a ZERO mer! Why would anyone want to buy an etf which holds 65 or 75 stocks, many of which might not be quality stocks. Even a 0.12% mer (plus mgt fee), charged every year to your account, can amount to thousands of dollars.


I do because I sleep well with simple diversification that still has us on track to have $megaM of invested assets in retirement without spending much time thinking about portfolio decisions. My years of stock picking proved I should spend more time running my business and living a fun life and less time trying to beat overall market performance.


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## HaroldCrump (Jun 10, 2009)

cannew said:


> If you were truly a cheapskate, you would have a ZERO mer!


It is not possible to have 0 MER, even if you buy only direct stocks and bonds.
Your trading commissions are part of your own MER.

Unless of course you buy 1 stock with a large lump sum and never sell or add to that position.
Like 100,000 shares of Berkshire bought in 1964 :biggrin:


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## cannew (Jun 19, 2011)

I also went through the years of trying to out-guess the market or buying and selling to try to grow the pile. In the end I settled on the dividend growth strategy and since I've learned to concentrate on the Income my portfolio generates. It's gone up each year and now that I'm retired my dividends are double my CPP & OAS (I have no other pension). Yes my portfolio is up but I don't really care whether the value is up or down. I only watch the market to see if I can buy more of the stocks I own.

If you think the fund managers are smarter than you, than look at their top 10 holdings and select from them. You could probably ignore the other 65 holdings.


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## cannew (Jun 19, 2011)

HaroldCrump said:


> It is not possible to have 0 MER, even if you buy only direct stocks and bonds.
> Your trading commissions are part of your own MER.
> 
> Unless of course you buy 1 stock with a large lump sum and never sell or add to that position.
> Like 100,000 shares of Berkshire bought in 1964 :biggrin:


Ok commissions are unavoidable, unless you establish drip's. I try to keep my commission less than 1/4 of 1% and I rarely buy or sell. Made two buys in the past year of $25,000 each and no sales costing 0.0008%


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## larry81 (Nov 22, 2010)

0.129234251459% as of today 

BMO ZRE MER piss me off !


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## namelessone (Sep 28, 2012)

Self directed portfolio: 3.8% YTD 2014 (Transactional + interest )
Yeah, it's bit high but I moved from Questrade to IB and expect the expense to go down to 30% of previous level.


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## Rysto (Nov 22, 2010)

larry81 said:


> So, any of you cheapskate managed to achieve a <0.10% average MER ?


That depends on how you count GICs. If you consider GICs to have a 0% MER than my average MER is 0.08%:

20% VCN (0.05%)
30% VTI (0.05%)
30% VXUS (0.14%)
10% GLG (0.17%)
10% GICs (0%)

I'm not going to lie, one of the big reasons why I don't hold any REITs in my allocation is the comparitively large MERs.


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## My Own Advisor (Sep 24, 2012)

I've been unbundling REITs across my portfolio. I hope to complete the process in 2015.


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## BoringInvestor (Sep 12, 2013)

0.20% consisting of XIC, VTI, VXUS, ZRE, XBB, and XRB.


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## larry81 (Nov 22, 2010)

Well this is a sad day...

I bough more ZRE units (According to my AA), this purchase raised my portfolio weighted average MER to 0.14% !!!

At this rate, i might as well call Investors Group right now and hand them my entire life-savings !


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