# Mawer Costs



## OneSeat (Apr 15, 2020)

Is a $50 BMO-IL charge normal for buying a Mawer fund?

I have never liked Mutual Funds because of their "arms-length" information ("Give us your money now and we will tell you later what you have bought") but I was attracted to buying some MAW102 based on (a) good comments about Mawer in general on these pages and (b) the content of this102 fund versus the XEF alternative.

I did spend what seemed like all day on the telephone trying to get the cost information first with BMO who seemed unwilling or unable to help and then similarly with Mawer who would not extend their information to advise me what they expected BMO might charge. Then when the information finally appeared on my account this evening there was $50 unaccounted for - which I assume is BMO's charge. It didn't help that the unit price rose on the day I bought and fell the next day which I could do nothing about of course.

Not the end of the world of course - it's only money.


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## AltaRed (Jun 8, 2009)

There is (has been) no charge to buy mutual funds at BMOIL. I purchased MAW104 in an RESP almost 3 weeks ago (as I do every year at this time) with no charge.

No need to phone them about commissions and fees. They are published here



> We offer you access to over 9,500 mutual funds. No commissions apply to buy, sell or switch (an early redemption fee may apply, see details below).


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## james4beach (Nov 15, 2012)

OneSeat said:


> Then when the information finally appeared on my account this evening there was $50 unaccounted for - which I assume is BMO's charge. It didn't help that the unit price rose on the day I bought and fell the next day which I could do nothing about of course.


I suggest checking the official fund price for the day using the link below. Make sure you check the date the purchase is dated. For example if you placed the mutual fund buy order on Thursday at 2:30 pm eastern (which is likely after the cut off time) then it's as if you placed the "buy" order on Friday.









Daily Prices | Mawer







www.mawer.com





It would be good to double check that, just to figure out whether money is actually unaccounted for. Then at least you could phone BMO and get to the bottom of it, quoting the fund's price for the day you bought on.


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## OneSeat (Apr 15, 2020)

Thank you both for those references which I was aware of.

May be I don't fully understand the buying process. When I place the order I specify a round number of $$$$. When my account is updated it specifies a round number of units. Obviously the two do not normally match (arithmetically). What happens to the fractions of a unit my $$$$ would have bought?

Just reading my account - (units) x (price) do not = (total amount).


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## GreatLaker (Mar 23, 2014)

My main experience is with TD Direct. Mutual funds can be purchased in fractional units. When I buy mutual funds including Mawer I specify a dollar value. When the order is filled it states units purchased to 3 decimal places, price to 2 or 3 decimal places and total value to the penny. If I place an order before 3:00 PM today it fills the morning of the next trading day at tonight's closing price. I have noticed that on some orders after it fills but before it closes, one of the values may be approximate, but when the order closes the total dollars is what I ordered, the price is the published closing price on the day I placed my order, and the number of units is calculated to 3 decimal places. 

I suspect that when the order closes the correct number of units will be calculated for your order.


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## GreatLaker (Mar 23, 2014)

I just noticed this popped up in my podcast feed this morning:
Playing the plan: Mawer’s international equity portfolio



Mawer Podcast said:


> Lead portfolio manager, David Ragan, discusses how the portfolio did over the past year, why some companies were more resilient than others, and what makes skepticism a competitive advantage.
> 
> *Highlights include:*
> 
> ...


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## OneSeat (Apr 15, 2020)

Well after 2 hours waiting I finally spoke to someone at BMO-IL who agreed with me that the information presented is "false" because they do not include fractional numbers of units at this stage - but it should be updated in a few days. He also added that this is normal for Mutual Funds. Really?

So right now my account shows incorrect "Quantity" and incorrect "Average Cost". But there should be no added cost when it is corrected. It amazes me that a financial company has systems that allow this to happen. Are all brokers the same?


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## AltaRed (Jun 8, 2009)

It has always been that way. The fractional units don't show up until until the contacted price at NAV after closing is calculated by Mawer and given to BMO IL the following day. Then the Trade Confirmation is generated by the end of that day or the next day, and the account will show the true units bought by the following business day. It will always take at least 2 business days before you know what you bought at what price. There is no rush to know these things. Lighten up!

Added: Whether I purchase MAW104 at BMO IL or Scotia iTrade, it is a similar routine. It is the nature of the mutual fund system. Purchase price can only be calculated once NAV is known after closing on purchase day, and purchase day is the day you place the order IF you get the order in before mutual fund cutoff times which vary a bit brokerage to brokerage If you miss cutoff time, you won't have a contract price until AFTER the close of the FOLLOWING business day and that price is not known to the brokerage until the business day following that...and they may post it during the business day or after closing of that specific day...when the Trade Confirmation is generated as well.

One reason why I do not generally buy mutual funds is due to the unknown price one has to pay between time of order and the actual closing of that business day (or the following business day if I miss the cutoff time). Imagine the days before online systems and you wouldn't know until you got your paper statement until the following month. People today think everything is instantaneous when it really is not. Buy ETFs instead at the precise limit price you are willing to pay. Instant gratification.


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## Beaver101 (Nov 14, 2011)

OneSeat said:


> Well after 2 hours waiting I finally spoke to someone at BMO-IL who agreed with me that the information presented is "false" because they do not include fractional numbers of units at this stage - but it should be updated in a few days. He also added that this is normal for Mutual Funds. Really?
> 
> So right now my account shows incorrect "Quantity" and incorrect "Average Cost".* But there should be no added cost when it is corrected. It amazes me that a financial company has systems that allow this to happen. *Are all brokers the same?


 ... along AltaRed's suggestion to "lighten up!" ... it would be funny if BMOIL requires an initial false fee too to buy one of "their" inhouse mutual fund. 

Seriously, just wait a few days when your purchase is "settled" and you can blast BMOIL.


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## OneSeat (Apr 15, 2020)

Thanks all for your comments. I guess I didn't realise we were still in the 19thC - or at least BMO are. But that still does not in my mind justify publishing false info in their Account. Maybe I spent too long trading with Japan where every little detail had to be agreed and documented before a meeting was over - slower meetings but faster business.

Out of general interest - I still have my old account in the UK but they have modernised it - whether buying or selling the final, updated account details are 'there' before I have time to click the button to change screens. I suspect they have their own internal facility for popular stocks because I have to 'accept' their price offer within 10 seconds and even then they often beat it by a fraction or two.

OK - I've lightened up now - but I still think they are doing it wrong.


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## AltaRed (Jun 8, 2009)

Your choice to be critical based on other experiences. Consider that Canadian processes (likely across most/all brokerages) do things a certain way. Certainly mutual funds take at least 2 days to post data. What BMO should do is NOT post anything until the actual data is known...but OTOH, I have seen posts in forums critical of brokerages for immediately showing a reduction in Buying Power, but not immediately posting what was purchased. Can't have it both ways, and especially based on how mutual funds operate in Canada at least.

If you want same day gratification and accuracy, buy ETFs instead off the stock exchanges.


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## GreatLaker (Mar 23, 2014)

OneSeat said:


> Out of general interest - I still have my old account in the UK but they have modernised it - whether buying or selling the final, updated account details are 'there' before I have time to click the button to change screens. I suspect they have their own internal facility for popular stocks because I have to 'accept' their price offer within 10 seconds and even then they often beat it by a fraction or two.


With stocks, you are trading with another buyer or seller, so the price is agreed on and known, and the order fills immediately (assuming your bid or ask price and quantity are acceptable to another trader). If there is not a buyer or seller at your bid or ask price the order says open until it either fills or expires. And if you set a limit price, you may get a fill at a price better than your limit.

Mutual funds are different. You are buying from the fund company (or they are buying your units back). Mutual funds are priced after the market closes at a price based on the net asset value of all the outstanding units. Then orders fill the next trading day at that price. There is no dynamic price and bid/ask functionality for mutual funds. The disadvantage is the price may move against you before it fills. But the advantage for infrequent traders or casual investors it is simpler to just buy or sell a dollar value, rather than have to choose a number of units and go through the bid/ask process and possibly set limit prices.


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## OneSeat (Apr 15, 2020)

- - - still does not in my mind justify publishing false information - - -

Thank you all for responding.


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## james4beach (Nov 15, 2012)

The mutual fund system has always upset me. So many weird, undisclosed, opaque and mysterious things going on.


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## Yasehtor (Oct 12, 2018)

Mawer and BMO are not conspiring to mislead or cheat anyone. 

_OneSeat you said their approach is "Give us your money now and we will tell you later what you have bought" 
Everyone investing in a fund should read at a minimum the Fund Facts for the fund and preferably the Prospectus.
When you invest in mutual funds you are authorizing them to invest your money in accordance with the criteria outlined in the Prospectus. You can read the annual and semi-annual financial statements to get a better idea of the investment they are making. You can then choose to accept that it is in line with what you like and continue to hold or if unhappy sell the fund.
Mutual funds do not have instantaneous pricing and most are priced at the end of each day. That too is outlined in the Prospectus. The best you can do is look at the previous day closing price, where the market is going on a particular day and get an idea of where it is headed. If you purchase at 11am or 3 pm you will get the same price, the closing price for the day. Mutual funds are not intended for short-term trading so a few days to see the full and partial units show up on a brokerage's statement is no big deal. Many funds charge a 2% fee for short-term trading and that money goes back into fund for the benefit of the remaining unit holders. _


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## OneSeat (Apr 15, 2020)

Yasehtor said:


> _Everyone investing in a fund should read ........... Fund Facts........._


Thank you for the lecture!

I did of course read whatever was reasonably available on the Mawer and the BMO-IL websites although someone on the forum did later provide a link to some dated advertising type material that I had not seen.

I was not expecting any charge but after my purchase my BMO-IL account provided false information indicating what appeared to be a $50 charge. A few days ago now I did finally get a call back from a managerial type at BMO to discuss my point and I raised several other similar examples. He agreed with me and said he would investigate and get back to me. I won't hold my breath!


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## AltaRed (Jun 8, 2009)

@One Seat: You won't get anywhere, or any empathy, crying foul about 'falsified' information. Each brokerage has similar, but not identical, processes for posting transactions. 

In the RESP I have with BMO Investorline, I made a $2500 purchase of MAW104 by 10am PST on Jan 4th based on a contribution to that account earlier that morning. The number of full units purchased showed up a day later (once the contract price as of closing on Jan 4th was known) and was back-dated Jan 4th as it should. The fractional units showed up 2 days later back-dated to Jan 6th. 

Nothing wrong with that at all. I know from purchasing mutual fund units in years past this is how it works.


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## OneSeat (Apr 15, 2020)

Alta: I appreciate all the excellent info you provide on this forum - I agree with your reply to my above post - and I do not expect BMO to change anything as a direct result of my input. BUT - things do change and customers' input does in aggregate affect companies' future actions. Let's look back in 10 years' time.


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## Yasehtor (Oct 12, 2018)

OneSeat said:


> Thank you for the lecture!
> 
> I did of course read whatever was reasonably available on the Mawer and the BMO-IL websites although someone on the forum did later provide a link to some dated advertising type material that I had not seen.
> 
> I was not expecting any charge but after my purchase my BMO-IL account provided false information indicating what appeared to be a $50 charge. A few days ago now I did finally get a call back from a managerial type at BMO to discuss my point and I raised several other similar examples. He agreed with me and said he would investigate and get back to me. I won't hold my breath!


OneSeat, my apologies if you find my comments too preachy. My main point is you need to investigate prior to purchasing and only purchase what you feel meets your needs. There is lots of information of the Mawer website about their funds, but if you want more details then I would suggest you look up information at Sedar.com . You will find prospectuses, financial statements, annual information forms, fund facts and other reports that the mutual fund company is required to file. It is a great resource for any investor.

With respect to what appeared to be a $50 charge, from your later comments on this thread there was no charge for buying the funds ( which of course there shouldn't be). The confusion was only due to how brokerages provide details on what was purchased. AltaRed has outlined this in detail, so no need to duplicate his comments. 

Would it be nice if brokerages updated mutual fund purchases to show full and partial units at the same time... of course it would and in some ways one has to wonder why it isn't that way now. However, if you understand it is just a matter of timing then it's not really a big deal for most investors. If you were dealing with the mutual fund company directly my experience has been that the full purchase (full and partial units) is shown at the same time.

You mention other similar examples. Are they suggestions you have for improvements to BMOIL?
They are in the process of improving their website, but we will have to wait to see how it goes and whether the changes are merely cosmetic.

If you don't know already, it should be noted that Mawer is one of the few fund companies that do not pay trailer fees to brokerages. Most fund companies pay a trailer commission to a brokerages on a regular basis. For may D series funds that self -directed mutual fund investors purchase the trailer is at least 0.25%. That of course reduces the return to the investor.

As to getting a call back, you are lucky it was within a few days. The phone lines are jammed and BMOIL has temporarily discontinued their My Link confidential messaging service. That situation is certainly annoying and needs improvement. While they say they will be addressing it in the first quarter the proof is in the pudding.


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## AltaRed (Jun 8, 2009)

Yasehtor said:


> Would it be nice if brokerages updated mutual fund purchases to show full and partial units at the same time... of course it would and in some ways one has to wonder why it isn't that way now. However, if you understand it is just a matter of timing then it's not really a big deal for most investors. If you were dealing with the mutual fund company directly my experience has been that the full purchase (full and partial units) is shown at the same time.


Brokerages CAN show full and partial units at the same time IF they wait the extra ~2 days to get the confirming information from the mutual fund company. Until the partial is fully confirmed, the brokerage really does not know for sure, even with a contracted price. 

Example: Invest $10,000 in MAW104 early on Jan 29th. At close of business, contracted price happens to be $33.9856 per Mawer website (4 decimal points). That translates to 294.24226xxxx units on my abacus. Does BMOIL post 294.242 units? Or do they post 294.243 units? They don't know how Mawer will round off until Mawer gives them the information. Hence they only post 294 units initially.


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## Yasehtor (Oct 12, 2018)

AltaRed, I understand the reason for the delay by the brokerage and have never had a problem waiting as mutual funds are not meant to be traded like stocks. However, in this age of high tech there is really no reason that the full and partial units cannot be determined at the same time the unit price is determined. It all has to come from the mutual fund company who determines the unit price at the end of the day and the number of units involved in a transaction. If one holds the funds directly with the fund company the transaction on the fund company's investor site would just show the unit price and all units including partial units. It's really just a matter of transferring the full data to the brokerage. Don't expect it to change quickly, but it is certainly a possibility.


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