The Best Low-Cost Canadian Index Fund

 

Why?

  1. 8.2% return in the past 5 years
  2. Lowest MER fee for good return at 0.39%

The Catch?

  1.  Requires a minimum of $50,000. This is how they keep their fees low! If an investor comes in with $100 they take up the same amount of time and resources as the investor who comes with $50,000 so that’s why funds at all other banks and firms that cater to the masses have much higher MERs.  This higher entrance fee keeps too many people from having it. Too many people indexing causes mispricing in the efficient market theory.

How much difference can half a percent in additional MER fees make?

If you are paying half a percent in extra MER fees, this could lead to nearly as much money paid in fees as your total contributions over your working life.  $1 million lost in fees over 40 years on a $1 million of contributions.  If the fund is giving returns that are less than or only meet CIBC’s premium index fund, there is no reason to pay the extra fees.

If you already maxed out your investment in your own business and have $50K liquid cash then call your nearest CIBC branch to set it up:

  1. https://www.cibc.com/en/personal-banking/investments/mutual-funds/growth-funds/canadian-index-fund-premium.
  2. https://www.cibc.com/en/personal-banking/investments/mutual-funds/growth-funds/balanced-index-fund-premium.html

More investment advice is here:

  1. https://thutaccounting.wordpress.com/2015/06/22/housing is a poor investment!
  2. https://thutaccounting.wordpress.com/2015/06/09/the-power-of-compound-interest/

Canadian Western Bank has a business savings account that pays 1.15%

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