Page 186 - A Canuck's Guide to Financial Literacy 2020

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▪ Portfolio Management Fees
▪ The portfolio management fee is the portion that is paid to the fund company
and portfolio managers managing the fund. This fee covers research,
compliance, trading and other events that may go into managing the day to day
activities of the fund.
▪ Trailer Fees
▪ The trailer is paid to the investment dealer who sold the mutual fund. The
investment dealer then may pay a portion of the trailer to the advisor who
recommended the mutual fund to the client. The trailer is typically 1%.
▪ Operating Costs
▪ Operating costs cover custodian fees, accounting fees, auditing, record keeping
and much more.
▪ GST/HST
▪ Mutual funds include GST/HST in their management fees.

Example of MER: Fund ABC has a MER of 0.80%. If an investor has $10,000 in the fund,
their annual cost would be $80.

Types of Mutual Funds

There are over 5,000 different types of mutual funds, each different than the other. The
most common types of mutual funds have a combination of equities and fixed income.
Below we’ll go over the most common types of mutual funds that you might run into during
your course of investing.