After innovating and leading in online high-interest savings accounts for years, ING Direct is introducing three low-cost, index-based, mutual funds under the “Streetwise” name. The Streetwise funds offer one-stop convenience for all-inclusive fees of 1% – no minimums, no sales loads and no administration fees. The Balanced Streetwise fund has a classic portfolio split – 40% in Canadian Bonds and the 60% in stocks, split equally between the S&P/TSX 60 index, S&P 500 and MSCI EAFE. ING also offers a slightly more aggressive version with 25% in bonds and 75% in stocks and an income version with a 70% allocation to bonds.
While the MER at 1% is a bit steep and you can construct the same portfolio with TD e-Series Mutual Index Funds for less than half the cost, ING’s mutual funds are even cheaper than TD Bank’s indexed portfolios. It is hard not to get excited when a major player is promising to bring low cost, passive investing for the smallest investor and I hope that costs will only go down from here.