ETF Index Investing Course
5. ETF vs. TD e-Series
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Kornel
2 Comments
Marshall Whitall
February 10, 2023Hi Kornel,
My partner and I have been making our way through your course. We have been looking to diversify our portfolio specifically with ETFs. I currently am invested in the E-series funds. I am curious what your opinion might be on holding onto these funds. The high fees weren’t apparent to me when I first started with e-series as it seemed less daunting when I started investing. My goals are long term but I am not sure if I should hold the funds I have or allocate them toward ETFs. Any input would be appreciated.
By Kornel Szrejber
February 14, 2023Hi Marshall. I just checked the latest fees on TD e-series and they are still definitely significantly higher compared to individual ETFs. I found this article which summarized the funds and fees well. With index ETFs, you’re able to pay an MER of less than 0.15% (as an average, over the whole portfolio) so the savings definitely are still very significant in 2023. I also found this page directly on TD’s website showing their fees.
I can’t legally tell you what you should and shouldn’t buy, but looking at it from a strictly mathematical standpoint, the savings are definitely very significant when going with index ETFs. I’m surprised that e-series fees are still that high with the invention of asset allocation ETFs. With these TD e-series, you still have to rebalance which is extra management and labour on your part. With asset allocation ETF, the rebalancing is done for you which is very convenient and a big time saver. Also, the MER on an asset allocation ETF these days is around 0.20%-0.25% the last time I checked so the TD e-series appear to be even less competitive to me in 2023, since you’re paying a higher fee, and are not getting automatic rebalancing. So, even if you hate rebalancing and don’t want to do it, you have the option of getting an asset allocation ETF where it’s done for you and where you’re still paying less than the e-series.
I hope that helps 🙂
Kornel