What an MER is
MER stands for management expense ratio. If a fund has a 1% MER and you hold $10,000 in it for a year, it costs you about $100 that year. You never get a bill. The fee is taken inside the fund, so it shows up as slightly lower returns.
Why a small number matters
Two people each invest $50 a week for 30 years. Both funds earn 6% a year before fees. The only difference is the fee.
Both deposited $78,000. The difference is about $29,000.
Assumes a constant return and monthly compounding. Real returns vary from year to year and are never guaranteed.
Want to see it with your own numbers? Try the fee calculator.
Where costs can sit
- MER. The fund's own yearly fee. It's in the ETF Facts or Fund Facts document.
- Trailing commission. Part of some mutual funds' MER that goes to the firm that sold it.
- Advice fees. What you pay an adviser or a managed service, often a percentage of your balance.
- Trading commissions. A charge per buy or sell at some brokerages.
- Currency conversion. A cost when you buy something priced in U.S. dollars.
A fee is a price, not a penalty
Fees pay for something: running the fund, advice, a plan, someone to call. Good advice can be worth paying for. The goal isn't the lowest number at any cost. It's knowing what you pay and what you get for it.
Your costs, in dollars, in early 2027
New rules took effect on January 1, 2026. Your annual report on charges, delivered in early 2027 and covering 2026, will show the ongoing cost of the funds you hold in dollars for the first time. When it arrives, read that line.
Do this before the next lesson
- List each fund you hold and find its MER in the ETF Facts or Fund Facts.
- Multiply: balance × MER = what it costs you in a year. $8,000 at 1.5% is $120.
- If you work with an adviser, ask one question: "What do I pay in total each year, in dollars?"
A fund has a 2% MER. You hold $10,000 in it all year. Roughly what does it cost you?
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Where this comes from
- Fee illustration: Planted North calculation ($50 a week, 6% a year before fees, monthly compounding, constant returns)
- Total Cost Reporting (in effect January 1, 2026; first annual reports in early 2027): Fidelity Canada explainer of the Canadian Securities Administrators rule