Author Topic: Not Tax related... Just a Canadian Investing question  (Read 608 times)

frugalcanuck

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Not Tax related... Just a Canadian Investing question
« on: September 23, 2017, 07:09:30 PM »
I am aware this is not tax related, but it is still a Canadian ETF question.

Ishares XUU total market ETF MER is %.07 and cheaper than Vanguards VUN with an MER of %.16
When looking at the holdings of XUU it only has 4... US Ishares that also have a MER ranging from %.03 to %.07
Is the XUU MER calculation taking into account the MER's from the other Ishare holdings, or is this something the purchaser should take into account when trying to find the cheapest ETF?

Sisko

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Re: Not Tax related... Just a Canadian Investing question
« Reply #1 on: September 23, 2017, 11:00:49 PM »
Good question, I've never thought about it before. I think the MERs are usually include the MERs of the underlying funds, otherwise comparing them would be difficult.

I found this in regards to XUU:
https://www.blackrock.com/ca/individual/en/literature/fact-sheet/xuu-ishares-core-s-p-u-s-total-market-index-etf-fund-fact-sheet-en-ca.pdf
Quote
MER: As reported in the fund's most recent Annual
Management Report of Fund Performance. MER includes
all management fees and GST/HST paid by the fund for
the period, and includes any fees paid in respect of the
fund's holdings of other ETFs.

Similarly I found this in regards to Vanguard Canada:
Quote
The management fee is equal to the fee paid by the Vanguard ETF to Vanguard Investments Canada Inc. and does not include applicable taxes or other fees and expenses of the Vanguard ETF. For any Vanguard ETF which invests in underlying Vanguard fund(s), there shall be no duplication of management fees chargeable in connection with the Vanguard ETF and its investment in the Vanguard fund(s).

So I think you can compare the MERs directly.

Mr. Rich Moose

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Re: Not Tax related... Just a Canadian Investing question
« Reply #2 on: September 25, 2017, 08:01:40 AM »
Yes, the MER includes the fees of underlying holdings. Blackrock products have gotten very competitive and are often more liquid than the comparable Vanguard products in Canada.
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