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I am Canadian, with income just below marginal higher rate. My RRSP contributions were always filled, and the rest went to extra mortgage payments.

I just finished paying off the mortgage and will now have some spare money toward retirement in, say, 10 years. I can save around $2K/month. TFSA contributions are limited to $5K/year, and all the other savings plans/GICs pay interest rates that can only be detected with a microscope.

So, I need to invest, and assuming I'm not dumb enough to think I can pick stocks better than Warren Buffett, I would stick to index tracking funds. But all the options seem aimed at U.S. citizens.

What are the choices for us northern frugal types?

Edit: To clarify. I assume ETFs the safe/easy answer. But most investor sites are aimed at Americans, and I would like to invest in economies beyond the TSX.

I was looking for pointers to which funds were easiest/possible for Canadians. And why my Canadian bank seems to charge 2.5% MER for an ETF that American's pay 0.06% on. Do I have to become an expert on rebalancing and tax accounting to consider anything more sophisticated than a GIC?

  • Re: "invest in economies beyond the TSX". You can buy ETFs on the TSX that invest in markets beyond the TSX. As for the 2.5% you mention, you must be referring to mutual funds, as opposed to ETFs. BMO sells ETFs on the TSX and their MERs are well below 2.5% (but not yet as low as 0.06%.) – Chris W. Rea Feb 2 '15 at 4:08
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I quite like the Canadian Couch Potato which provides useful information targeted at investors in Canada. They specifically provide some model portfolios.

Canadian Couch Potato generally suggests investing in indexed ETFs or mutual funds made up of four components. One ETF or mutual fund tracking Canadian bonds, another tracking Canadian stocks, a third tracking US stocks, and a fourth tracking international stocks. I personally add a REIT ETF (BMO Equal Weight REITs Index ETF, ZRE), but that may complicate things too much for your liking. Canadian Couch Potato specifically recommends the Tangerine Streetwise Portfolio if you are looking for something particularly easy, though the Management Expense Ratio is rather high for my liking.

Anyway, the website provides specific suggestions, whether you are looking for a single mutual fund, multiple mutual funds, or prefer ETFs.

From personal experience, Tangerine's offerings are very, very simple and far cheaper than the 2.5% you are quoting. I currently use TD's e-series funds and spend only a few minutes a year rebalancing. There are a number of good ETFs available if you want to lower your overhead further, though Canadians don't get quite the deals available in the U.S. Still, you shouldn't be paying anything remotely close to 2.5%. Also, beware of tax implications; the website has several articles that cover these in detail.

  • Agreed. The Canadian Couch Potato website is a great resource. – Wes Feb 2 '15 at 3:39
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You haven't looked very far if you didn't find index tracking exchange-traded funds (ETFs) on the Toronto Stock Exchange. There are at least a half dozen major exchange-traded fund families that I'm aware of, including Canadian-listed offerings from some of the larger ETF providers from the U.S.

The Toronto Stock Exchange (TSX) maintains a list of ETF providers that have products listed on the TSX.

  • Vangaurd's page answered some of my questions - was just looking for any options beyond what their sales pitch was trying to sell me. – Canadiansaver Feb 1 '15 at 20:58

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