Understanding MER fees

This calculator is designed to show how fees affect investments.

“MER” stands for management expense ratio, which is a yearly fee you are charged. For example, if your MER is 1.5%, that means every year you pay 1.5% of your total investment balance. Many people don’t realize this because these fees are silently taken off your investments.

In Canada, mutual funds often have an MER of 2% or higher. Though 2% might sound small at first, it can actually cost you a lot of money over multiple years.

How to use this calculator

The primary use of this calculator is to compare two similar investments. To do this, enter identical data into both Example 1 and Example 2 fields except for the MER/Fee field (the first field).

You can find your investment’s MER by searching the investment’s fact sheet online, or by calling your financial institution. Or, simply use the default MER numbers in the calculator. 0.24% is a typical number for many ETFs and 2.00% is typical for many mutual funds.

For the Initial investment category, enter money you already have in your investment. For Regular contribution, enter money you will be adding to the investment regularly. For Contribution frequency, set how often you’ll be contributing to the investment. Investment return is how well you predict the stock market will perform. I like to use 5%-6% for conservative estimates and 7%-8% for more optimistic estimates. And Number of years is how long you predict you’ll hold the investment for.


Example 1

Example 2

Future value
(no fees)

MER fees

Your total contribution

Investment growth

Final investment value

Your potential savings:

Example 1

Your initial investment of plus your investment of at a yearly return rate of will be worth after .

Example 2

Your initial investment of plus your investment of at a yearly return rate of will be worth after .