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EdgePoint MERs: What you get for what you pay

A management expense ratio (MER) is what you pay each year to own a mutual fund. This fee compensates EdgePoint and your financial advisor for a range of services. Here’s what goes into the MER for EdgePoint Portfolios (Series A and A(N), non-HST):

Management fee: 1.70% − 1.80%

Comprised of the investment management fee and trailing commission.

Investment management fee: 0.70% − 0.80%

This is what you pay us for investment services.

WHAT YOU GET: Investment services

Our investment team has over 100 years of combined portfolio management experience. We dedicate our time to researching and analyzing businesses to select what we believe are the best investments for your EdgePoint Portfolio.

What activities are involved exactly? Besides following a rigorous travel schedule for attending conferences the world over, we scour countless resources – trade publications, global news outlets and industry experts, to name a few – to generate viable investment ideas. Before buying a business, we perform in-depth fundamental analysis of its financial reports, study its competitors and meet with its management. Further due diligence consists of building financial models to understand a company’s true worth. We spend weeks and sometimes months scrutinizing an idea before investing in it. We must then continue to monitor the business and its competitive environment. Some of our research depends on sophisticated, expensive databases. We also have exclusive access to analysts’ reports from major brokerage firms. At the same time, independent thought is key to our success.

Trailing commission: 1%

This is what you pay your advisor’s firm for financial services and advice. Your advisor receives a portion of this commission. The commission is deducted from your investment.

WHAT YOU GET: Financial services/advice

Your advisor’s role is to help you reach your financial goals. To meet your needs, this can entail retirement planning, budgeting and creating a long-term savings strategy, ensuring you have proper insurance coverage, managing tax and estate issues and even providing guidance on business succession.

Your advisor is also there to counsel you on investment opportunities suited to your individual situation and tolerance for risk. This means staying abreast of financial markets, continually monitoring your portfolio holdings, and helping you manage your emotions to keep you from unduly separating yourself from your money. Advisors must be confident decision makers able to make recommendations under uncertainty and extreme time pressure, and have excellent people and communication skills.

Just as your fund manager incurs ongoing overhead expenses, so too does your advisor. Thus, the management fee is earmarked in part for costs related to advisor registration and licensing, compliance reporting and administration. Another portion is shared between your advisor and their dealership.

Fund operating expenses: 0.06% − 0.08%

This covers the fund’s administrative costs. You receive the same services no matter the fund company; however, what you’re charged can vary significantly.

WHAT YOU GET: Operating services

Included are all of the day-to-day expenses associated with running a fund, from setting up client accounts and maintaining records to outside legal and compliance oversight. Call centre outlays and other incidentals that “keep the lights on” also fall into this category.

Taxes: 0.09% − 0.26%

Simply put, a tax on your savings.

WHAT YOU GET: ???

We’re not sure what you’re getting for your money, but taxes comprise the second-largest MER expense. EdgePoint is one of the few fund companies in Canada to offer non-HST series to eligible investors (those residing in Alberta, British Columbia, Manitoba, Saskatchewan, Northwest Territories, Nunavut and the Yukon).

 

For exact, fund-specific MERs, please visit our Portfolios' pages:

EdgePoint Canadian Portfolio
EdgePoint Canadian Growth and Income Portfolio
EdgePoint Global Portfolio
EdgePoint Global Growth and Income Portfolio

 


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For Series A and Series A(N), non-HST. Total MER takes into account fee variances among Portfolios and investor province of residence.



Commissions, trailing commissions, management fees and expenses may all be associated with mutual fund investments. Please read the prospectus and Fund Facts before investing. Copies are available from your financial advisor or at www.edgepointwealth.com. Unless otherwise indicated, rates of return for periods greater than one year are historical annual compound total returns net of fees including changes in unit value and reinvestment of all distributions, and do not take into account any sales, redemption, distribution or optional charges, or income taxes payable by any securityholder, which would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. This is not an offer to purchase. Mutual funds can only be purchased through a registered dealer and are available only in those jurisdictions where they may be lawfully offered for sale. This document is not intended to provide legal, accounting, tax or specific investment advice. Information contained in this document was obtained from sources believed to be reliable; however, EdgePoint does not assume any responsibility for losses, whether direct, special or consequential, that arise out of the use of this information. Portfolio holdings are subject to change. EdgePoint mutual funds are managed by EdgePoint Investment Group Inc., a related party of EdgePoint Wealth Management Inc. EdgePoint® and Owned and Operated by InvestorsTM are registered trademarks of EdgePoint Investment Group Inc.