MER — Management Expense Ratio
The MER (Management Expense Ratio) is the total annual percentage deducted from your investments to cover management, administration, and operating expenses. The lower the MER, the more return you keep.
Real MER Impact
On $100,000 invested for 30 years at 7% gross:
- MER 0.1% (XEQT ETF): final value ≈ $700,000
- MER 0.5% (average ETF): final value ≈ $615,000
- MER 1.0% (low mutual fund): final value ≈ $530,000
- MER 2.5% (bank mutual fund): final value ≈ $340,000
Difference: $360,000 between MER 0.1% and 2.5% — the value of a home.
Typical Comparison
- Passive index ETF: 0.03-0.30% (XEQT 0.20%, VFV 0.09%)
- Active ETF: 0.30-1.00%
- Index mutual fund: 0.30-1.00%
- Bank active mutual fund: 1.50-2.50%
- Robo-advisor: 0.40-0.50% (fees on top of underlying ETF MER)
Frequently Asked Questions
Is MER visible on statements?
No, it's auto-deducted from returns. Look in the simplified prospectus or issuer's website.
MER vs TER difference?
MER includes management + admin fees. TER (Trading Expense Ratio) adds fund's transaction costs.
Does low MER guarantee better returns?
No guarantee, but reduces structural drag. Combined with broad index (XEQT), very effective long-term.
Do robo-advisors have hidden MERs?
Robo adds 0.40-0.50% on top of underlying ETF MER. Typical total: 0.60-0.80%.
🌐 Version française: /glossaire/ratio-frais-gestion/