Quote:
Originally Posted by GP_Matt
One of the problems with ETF's is that you have to pay a fee to buy into them and pay it each time you up your amount. ie if you are contributing $100 to your account each month and want to increase your ETF holding the fees would wipe out any savings from the lower MER very quickly. When you are holding mutual funds you can generally setup automated transfers and automatic purchases of small amounts every month.
There is also an issue with dividends. Say you take $10000 and buy an EFT that pays 5% dividend quarterly. That puts $125 into your account every 3 months that you have to pay tax on. Unless you plan to contribute another large lump sum every quarter then that money just sits in the account until you do. With a mutual fund the money is automatically reinvested so the money you earn is now earning more money for you.
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This is something you should be able to work out with your discount broker. You shouldn't be paying fees in this manner
