Money market MERs

With interest rates at very low levels, money market funds provide very little return on your money. That’s why it’s doubly important to choose only those funds with low management expense ratios (MERs). The higher the MER, the less the return.

Here are some of the highest and lowest MERs for Canadian money market funds, as reported by The Globe and Mail. Average for the category is 1.11%.

Acuity Money Market Fund: 2.43%
National Money Market Fund: 2.35%
Maritime Life Money Market Fund C: 2.16%
Co-operators Money Market VAII Fund: 2.03%
CI Money Market Segregated Fund: 1.93%
Equitable Life Money Market Fund: 1.87%

Low MERs
Altamira T-Bill Fund: 0.39%
Phillips, Hager & North Canadian Money Market Fund: 0.47%
Perigee T-Plus Fund: 0.48%
Mackenzie Cash Management Fund: 0.54%
McLean Budden Money Market Fund: 0.60%
Beutel Goodman Money Market Fund: 0.61%

Note that most of the high MER funds are segregated funds. They are more expensive because of the various bells and whistles attached to them, such as loss-protection. Since money market fun have little loss exposure, you are effectively paying for a guarantee you will never need. Therefore, I do not recommend holding segregated versions of these funds. (Sept. 2003)

This article originally appeared in The Income Investor, a monthly newsletter that provides expert advice on selecting income securities with reasonable risk. For subscription information, go to