Fees, today we are talking about fees. In particular we will talk about $XEQT and $VEQT because I own both and the fees are diffent and the expected outcome is the same. $XEQT MER = 0.19 $VEQT MER = 0.22 Pretty easy To figure this out. We will simply set the return in a compound calculator to that wonderful 7% mark for XEQT and set it to 6.97 for VEQT. Starting the account at $0 and saving $1000 per month. (keeping it simple) and we will compare the differance on a 10y 20y 30y and 40y horizon. 10y Xeqt 165,797. Veqt 165,562. 20y Xeqt 491,954. Veqt 490,337 30y Xeqt 1,133,529 Veqt 1,127,429 40y Xeqt 2,395,621. Veqt 2,377,176 10y Difference = 235 20y Diff = 1,617 30y Diff = 6,100 40y Diff = 18,447 I mean almost $20,000 over 40 years doesnt seem like much but you are in this case essencially paying for the same strategy. Blossom is advertising funds with well over 1% mer's. I made this because $HONE has come out with $HHII$HHIC and $HHIS as a part of its holdings. $HHIS has an mer of over 2%, thats insane. That means we should be trying to find a strategy with a similar outcome with less fees. p.s. hhic and hhii are both new and dont show the mer yet. I can only asume with leverage and coverd calls and hhis already charging an arm and a leg that the other 2 holdings are quite pricey (I have to extrapolate here). p.p.s I like comparing hone to veqt as the country allocation is suprisingly similar. I know you also get leverage but my other argument is that the fees will eat that alpha.
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16 Comments
Max Penders
@mjpenders · 20d
I'm personally only willing to pay 2%+ for true, uncorrelated alpha/factor exposure. CC exposure is definitely not worth it, especially when you can pay under 30 bps in the US
Sunny
@neuron · 19d
That’s y u might as well go for $zeqt — lower mer than xeqt and funds someone’s salary in Canada.
