Is there a point where worrying about MERs isn't worth it?

Ex; Dynamic Power American Progress fund has a fee of 3.4% vs Fidelity Canadian Equity index fund with a fee of 2%. Which would you pick? ... The Dynamic fund has returned and average of 19%/year since inception but the Fidelity fund only 11%/year.

You're comparing a Canadian equity index fund to a US equity index fund. Completely different risk profiles.

Not to mention I can't even find this progress fund when I google it. I did see the DP American Growth Fund which has returned 19.9% this year and 7.7% annually since inception.

Your post, my good sir, appears to be full of shit.

The main critiques of high MER funds are:

1) for an investor seeking to match the return of an index (ie: not hoping to "beat the market"), you can acquire funds that track the index extremely well for extremely low fees (<.4%). Paying 1.5%+ is just throwing money away if that is your goal.

2) While investors hoping to beat the market may tolerate higher MERs on actively managed funds, there is mixed evidence as to whether actively managed funds beat the market at all. Therefore, are high MER funds ever "worth it"? There is a volume of evidence that, after fees, most actively managed funds have not beaten the market in post-recession years.

Point 2 is the most debatable. Past performance does not guarantee future results and there are arguments that we have reached "peak passive" where perhaps markets will get less correlated going forward, creating a good opportunity for active fund managers.

We haven't see that yet, however, so who knows. For my money, the best strategy is to aim to match the market's returns and ride the wave.

/r/PersonalFinanceCanada Thread Parent