Comments on: CIBC Index Mutual Funds

By: Are you trading too much? | Canadian Capitalist

Are you trading too much? | Canadian Capitalist — Fri, 21 Jan 2011 04:23:52 +0000

[...] paying more than 20 basis points, you might be better off with TD e-Series or, for larger accounts, CIBC Index Mutual Funds. There is little point in investing in ETFs primarily for their low cost and then frittering away [...]

By: Lanny

Lanny — Wed, 19 Jan 2011 01:36:35 +0000

CIBC Investor Advantage offers cheap trading transaction fee, all investor out there please be cautions of the currency conversion charges when you trade US stocks. It is extremely high, shred your porforlio to the bone. PLEASE consider other trading broker ( Questrade, ITrade Nova), I bet you will be supprised of hidden fees in your trading costs if you enough attention.

By: Henry

Henry — Mon, 11 Oct 2010 21:23:56 +0000

@Cameron: Yes, CIBC index funds would pay both MER rebate to you and trailer fees to the brokerage. I think brokerages would not allow you buy mutual funds without transaction costs unless the funds pay some form of trailer fees. My guess is that CIBC index funds with MER rebate would pay between .10% to .25% trailer fees to the brokerage depending on the funds offered. That is much lower than regular advisor based mutual funds that pay .25% ( for Money Market Funds) to 1.25% trailer fees. My guess is that CIBC Index Funds with lower MERs would pay less, while CIBC Index Funds with higher MERs would pay more.

My biggest concern about CIBC Index Funds is that they are not currency hedged. Appreciation of the Canadian dollar may cancel out any gains from Emerging Market Index fund for example.

I checked CIBC Imperial Services and it is a full service brokerage within CIBC. By investing CIBC Index Funds with MER rebate at CIBC Imperial Services, you are getting access to a full service brokerage at a discount brokerage price. I would not be surprised if your advisor want to put you into “high MER, actively managed” funds to increase the trailer commissions paid.

By: Cameron

Cameron — Mon, 11 Oct 2010 19:17:19 +0000

I know of the MER rebate on the index funds, but does anyone know if these funds will pay out trailer fees? The prospectus was not clear enough on this point. My understanding is that if you purchase the index funds directy via CIBC that no trailers fees would be deducted. However, since I opened an Imperial investor account I am wondering if this still the case. Trying to get someone from CIBC to answer this is next to impossible.

By: Canadian Capitalist

Canadian Capitalist — Wed, 17 Mar 2010 19:27:50 +0000

@Allen: I don’t know if CIBC charges a fee on TFSA withdrawals. Many institutions have a limited number of free withdrawals and you can avoid the transfer fee by withdrawing the entire balance from a TFSA account in the last week of December, wait until the new year and contributing the same account to a new TFSA account. I realize this may not help you much now since your transfer is already done but it may be useful in the future.

By: Allen

Allen — Wed, 17 Mar 2010 18:37:18 +0000

Whatever investing you plan to do with or through CIBC be very sure you will be happy with your transactions before signing up. Keeping in mind if you decide to transfer your account to another institution that CIBC will be charging you a transfer fee of $ 135.00 plus tax or a $ 141.75 !!! I am a victim of their system when I moved my TFSA to another institution with much better returns than the 1.2376% CIBC paid me over a year!

By: dave

dave — Mon, 15 Mar 2010 11:36:22 +0000

Regarding CIBC and other Canadian companies offering Index funds – we bother with them at all?

db-xtrackers, Vanguard or Schwab all have lower priced etfs

You only need funds really – a MSCI World Equity + a Global bond fund..

By: J. Allen Strople

J. Allen Strople — Tue, 29 Dec 2009 03:30:31 +0000

Why does CIBC charge a $ 40. fee for someone holding mutual funds from another institution who wishes to sell any amount of these funds. I am thinking in particular when the CIBC is managing a substantial amount of their investment portfolio and are in receipt of trailer fees in excess of $5,000. per year. It strikes me as an overly greedy approach to financial management. I would appreciate some logical explanation for this practice.

By: Wealth Manager

Wealth Manager — Wed, 15 Apr 2009 00:58:46 +0000

Scratch that question – not sure what I was thinking at the time!

By: Wealth Manager

Wealth Manager — Tue, 14 Apr 2009 17:08:47 +0000

One question here: I’ve been buying the CAD$ (CIB484) version of the US Broad Market Index but there’s also the US$ denominated version (CIB884).

I recently read somewhere USD$ fund versions are unhedged and elsewhere the CAD$ versions are unhedged.

Can someone shed some light on this.