Management Fees: the Difference on your Investment

Management fees are a given when it comes to financial and investment management. Even investments that come without advice involve fees that affect your capital. These costs, which cover fund-related administration and services, take the form of a management expense ratio (MER), which is deducted from your assets. Assuming the same gross return, lower management expense ratios therefore mean higher assets over the long term, which is the ideal scenario for any investor.

Small percentage, big difference
Since it is a not-for-profit organization, a unique business model in the industry, FÉRIQUE Fund Management aims primarily to cover the management fees and operating expenses without creating a profit margin. By exercising rigorous budgetary management and reaching for positive market returns, it can pass along any surplus to clients in the form of lower MERs. This is also why the management fees for all FÉRIQUE Funds and Portfolios are among the lowest in Canada in comparison to their reference universe.¹

FÉRIQUE Fund Management reduces management fees for three portfolios
In conjunction with the launch of two new FÉRIQUE Portfolios, FÉRIQUE Fund Management has just reduced the management expense ratios (MERs) for the FÉRIQUE Moderate, Balanced and Growth Portfolios.

The management expense ratios for the FÉRIQUE Portfolios now stand as follows:

The FÉRIQUE Advantage
As shown in the following graph, this can result in a significant advantage for the owners of FÉRIQUE Funds or Portfolios who remain invested in the market for a number of years.

LOWER FEES, HIGHER CAPITAL OVER THE LONG TERM
Hypothetical Annual Return of 5%

Source: FÉRIQUE Fund Management

In this example, we compare the return net of fees of the FÉRIQUE Balanced Portfolio, which now has a MER of 1.05%, with a competing balanced fund that has a MER equal to the industry median MER for this category, i.e. 2.17%. We assume an initial investment of $500 and a further investment of $500 each month. The result? After 35 years, assuming a steady 5% return before fees for both investment vehicles, your FÉRIQUE Portfolio would be worth $95,000 more than if you had invested the same amount in the competing fund.

In fact, this latest MER reduction highlights the advantages of the FÉRIQUE business model, which consists of offering performing mutual funds with management fees among the lowest in the industry¹ – and high-quality advice offered at no additional charge⁵ to help in making informed decisions.

Would you like to know more about the FÉRIQUE investment solutions and management fees? Contact our Mutual Fund Advisors and Representatives at Advisory Services. They would be pleased to help you.

Services d'investissement FÉRIQUE and Gestion FÉRIQUE are non-profit organizations that work solely in your interest: Our profits are reinvested to benefit our clientele. Combining a competitive approach in terms of performance with management fees that are among the lowest in the industry, plus quality advisory services at no extra cost, our lineup is one of the most advantageous.

FERIQUE Investment Services
Monday to Friday 8 a.m. to 8 p.m.
T 514-788-6485
Toll free 1-800-291-0337
[email protected]

¹The MERs of the FÉRIQUE Funds are among the lowest in the industry when compared to their base universe in Canada according to Fundata Canada Inc.
²Current management expense ratios (MERs) for FÉRIQUE Moderate, Balanced and Growth Portfolios as of July 1, 2017.
³Current management expense ratios (MERs) for FÉRIQUE Conservative and Aggressive Growth Portfolios as of July 4, 2017.
⁴The FÉRIQUE Balanced Portfolio MER was 1.05% as of July 1, 2017, and the median for same-category funds in Canada was 2.17% as of June 30, 2017, according to Fundata Canada Inc. However, the MERs of the competing fund and the median may have fluctuated as of the date of this article. For illustration purposes, the monthly investment is assumed to be made at the beginning of each period and the spread between the MERs is assumed to remain constant throughout the period.
⁵Advisory services are offered at no additional cost if FÉRIQUE Funds are purchased through FÉRIQUE Investment Services.

FÉRIQUE is a registered trademark of Gestion FÉRIQUE and is used under license by its subsidiary, Services d'investissement FÉRIQUE. Gestion FÉRIQUE is an Investment Fund Manager and assumes management duties in relation to the FÉRIQUE Funds. Services d'investissement FÉRIQUE is a Mutual Fund Dealer and a Financial Planning Firm, as well as the Principal distributor of the FÉRIQUE Funds. Please note that for commercial purposes, Services d'investissement FÉRIQUE is also known in English as FÉRIQUE Investment Services.

There may be brokerage fees, trailing commissions, management fees and expenses associated with investment in the Funds. Management expense ratios vary from one year to another. Please read the prospectus before investing. The rate of return is used only to illustrate the effects of the compound growth rate and is not intended to reflect future values of a Fund or returns on investment in a Fund. Mutual funds are not guaranteed, their values fluctuate frequently and past performance may not be repeated.

FÉRIQUE Funds pay management fees to Gestion FÉRIQUE allowing it to assume the fees of the portfolio managers, the fees relating to the marketing or distribution of the FÉRIQUE Funds and the administration fees of the manager of the FÉRIQUE Funds. Each of the Funds pays all of its own operating expenses. No commissions are payable by the unitholders for a subscription in the FÉRIQUE Funds if such subscription is made through Services d'investissement FÉRIQUE; brokerage fees could however be payable should the subscription be made through a broker other than the principal distributor.