The Cost Of Owning a Mutual Fund
>Recently there's been a lot of renewed discussion in the media about the "supposed" high cost of owning mutual funds. It's true there is a cost associated with owning a mutual and no one is disputing that fact. Like anything you purchase, you need to consider the value you receive for the price you pay. As the old saying goes - you get what you pay for!
In order to know if you're getting good value, first you need to know what you're paying and what you're receiving for the fees you pay to a mutual fund manager.
At a high level, Mutual Funds offer a number of benefits. They include:
- Convenience and ease of investing
- Professional Investment Management Expertise
- Flexibility to meet your unique goals (there are many kinds of mutual funds)
- Ongoing reporting to keep you informed
- Active money management for additional protection (not all funds are actively managed)
Below is a short video that explains in simple terms the costs of owning a mutual fund commonly known as the funds MER.
In a future post, I'll talk about how to determine if the MER is worth it, compared to other investment options you might consider.
Here's the video - enjoy!