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Updated 2mo ago.
Updated 2mo ago.
The MER represents the total annual cost of an ETF expressed as a percentage of assets. It includes management fees, administrative costs, and taxes. These fees are automatically deducted from the fund's assets daily — you never receive a separate bill.
VEQT.TO has a MER of 0.24% per year. If you invest $10,000, you pay roughly $24 in annual fees. By comparison, XEQT.TO has a MER of 0.20% ($20 for $10,000). A typical Canadian mutual fund can have a MER of 2.0-2.5%, meaning $200-250 for the same amount invested.
Over long periods, the difference between a 0.24% and a 2.0% MER is enormous. Over 30 years, on a $10,000 investment with a 7% gross return, a 2% fund costs you roughly $60,000 more than a 0.24% ETF. Fees are the one variable you truly control.