ING Index Funds? Huh?

OK. So I’m a pretty big fan of index funds. I’ve been investing in TD eFunds for a while now and feel quite smug about paying a management expense ratio (MER) of less than half a per cent. In the Canadian mutual fund world, under .50 per cent is pretty darn good.

Anyways, I got an advertisement in the mail today from ING Canada announcing their new index fund called The Streetwise Fund™. My interest was piqued, so I read the whole dang ad. To say the least, the ING ad was pretty light on fund information and mostly contained legal jargon stating the stuff ING needs to say with regards to investing. To learn more about this Streetwise Fund I had to look-up the details online…this is what ING says about this new fund:

The Streetwise Fund™ is a Balanced Mutual Fund with investments spread across 4 major Stock and Bond Market Indexes including:

  • Canadian Bonds (DEX Universe Bond Index)
  • Canadian Stocks (S&P/TSX 60)
  • US Stocks (S&P 500)
  • International Stocks (MSCI EAFE)

Again, the site is pretty light on fund information including the MER! Sooo, I had to delve deeper to find the prospectus on this fund - why do some fund companies bury this information? So here’s the nitty gritty:

  • The Streetwise Fund comes in four flavours with varying equity and bond weights: Balanced Income Class, Balanced Class, and the Balanced Growth Class.
  • RRSP eligible.
  • There are no redemption fees for the Funds. (prospectus pg. 10).
  • Switches can be made from one Streetwise Fund to another without capital gains tax (prospectus pg. 11).
  • Dividends are automatically reinvested (unless you request to receive them in cash) (prospectus pg. 12).

Fund Fees: (prospectus pg. 13)

  • Management Expense Ratio: 1.0 %
  • Sales Charges and Deferred Sales Charges: 0%.
  • Redemption Fees: 0%.
  • Short Term Trading Fees: 0%. Although, ING does not approve of short term trading and have defined and adopted policies to deter this activity (prospectus pg. 11).

At the outset, ING’s version of mutual fund index funds seems ok. Albeit, it is the MER fee that kills me. With TD eFunds charging about half of ING’s Streetwise Fund, I have to still feel pretty smug about where my investments live. For me, paying the lowest possible amount in fees to track an index is of importance.

UPDATE: For another review on ING’s new fund, check out Canadian Capitalist’s take

Related Posts:

Comments:

  1. Canadian Capitalist January 16th, 2008

    Thanks for the link and your comment on my blog. While I am in no rush to sell my e-Series funds (which as you rightly point out cost less than half), I’m excited that a major player is going to give lots of publicity to the importance of low costs and indexing. Yes, the fees could be lower and yes, you could do better on your own but still ING deserves a pat on the back for this move.

  2. fox January 16th, 2008

    Canadian Capitalist: I am in agreement with you. ING’s venture into indexing is awesome news and I too look forward to their publicity! I just wish ING came in with lower fees to give TD a little competition. I can’t help but look to the States and see how little they pay for index funds and ETFs and wish we had some lower fee love on this side of the border. :)

Pings:

  1. On Being “Streetwise” January 16th, 2008

Leave a Reply: