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Unbundling the iShares CDN REIT Index Fund (XRE)

Posted on June 24, 2008

Norm Rothery (also featured in this video interview with Jon Chevreau) recently wrote that the ultra-low commissions offered by the discount brokers allow investors with large portfolios to buy the stocks that comprise an index directly and avoid the fees involved in holding ETFs. The concept is interesting but small investors who want to faithfully track an index need a very large portfolio to save money on ETF fees. The simple formula to figure out if it is worth unbundling an ETF is:(Number of stocks in the index * Trading commission ) / MER of ETFXIU, for instance, has 60 stocks, charges a...

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