Mutual Funds News

December 7, 2011 by staff 

Mutual Funds News, High mutual fund fees charged by companies like Investors Group are once again under the microscope, but I have no fear my modest holding in the stock of IGM Financial Inc. is in much jeopardy.

Investors Group and I have exchanged views the past week, online at financial post. com and in print, about how much value its clients get from its robust management expense ratios (MERs). Many of its funds sport MERs of 2.5% or more; even its bond funds are just shy of 2%, which in today’s low-interest-rate environment is an outrage in itself.

Even though there has been a sea change in how investors think, I have little doubt that IGM Financial, the owner of Investors Group, has a model that will keep minting money for shareholders – selling mutual funds and “advice” to investors who can’t be bothered with details like MERs.

There is still $773-billion invested in mutual funds, according to the Investment Funds Institute of Canada; the amount in exchange-traded funds is barely 6% of that: $49-billion, according to the Canadian ETF Association.

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