Stick with ETFs…

Article Excerpt

If you want to invest in index funds, we think you should stick with exchange-traded funds (ETFs) like those we recommend as buys. ETFs are like open-ended index funds in that they trade at net asset value. But ETFs trade on stock exchanges, just like stocks. You’ll have to pay brokerage commissions to buy ETFs. But you’ll make that back quickly with their low — 0.10% to 0.20% — management fees. Note that, for convenience only, we do recommend five bank-run index funds as buys. These bank index funds charge higher MERs than the comparable S&P/TSX 60 funds. But they let you invest small or odd amounts in accounts such as RESPs or RRSPs, so they may be suitable for your portfolio. The five funds are: 1) RBC Canadian Index Fund (0.68% MER) 2) TD Canadian Index Fund (0.84%) 3) CIBC Canadian Index Fund (0.98% MER) 4) Scotia Canadian Index (0.99% MER) 5) BMO Equity Index Fund (1.01% MER) MER)…

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