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I'm looking at e-Series funds offered by TD. They have low MERs and seem to offer a good low cost alternative to traditional mutual funds. What do you guys think? Am I better off with ETFs? Why would one choose one over the other given that my investment portfolio is not that large.

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Depends on your objectives and profile and a million other things. More information necessary. Mutual funds aren't going to perform any better than an otherwise diversified portfolio (J. Malkiel, 1995), so whatever minimizes fees is what you (read: everyone) should be looking for. There are commission free products available with TD. –  jmabs Jan 25 at 0:32

2 Answers 2

M Attia, the advantages of the TD e-series are that they are a low cost way to index your portfolio as well it gives you to opportunity to invest small amounts at a time. With ETF's, purchasing small amounts at a time would simply get too expensive.

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There are ways to trade index ETFs at no cost through various brokers. This would also allow you to trade small amounts frequently. –  rhaskett Jan 22 at 19:07

TD e-series index funds are great for regular contributions every paycheck since there is no trading commission. The personal finance blog "Canadian Couch Potato" has great examples of what they call "model portfolios" and one consists of entirely TD e-series index funds. Check it out: http://canadiancouchpotato.com/model-portfolios-2/

The e-series portfolio that is described in the Model Portfolios (linked above) made returns of just over 10%. This is very similar to the ETF Model Portolio.

One thing to remember is that these funds have a 30 day no sell time frame, otherwise a 2% fee is applied to the funds you withdraw.

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