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Assgnt. B: The homework states: "...if you feel a fund is the best 
choice for you, use the information you gained in the last two home-
work assignments to select the fund you prefer."

I don't feel a fund is the best choice for me at this time, but rather 
something like Spiders or iShares.  Does this mean my homework is over, 
or should I try to select which ETF is better for me?  However, I appre-
ciate that if I were contributing regularly (as I do in my pension plan), 
a fund would probably be a better choice.  Spiders have a mer of .12%, 
iShares a MER .09%.

Being a Canadian, there is one little wrinkle that I need to address.  
I need to choose a 'Canadian-content' investment (for reasons stated 
following), as well as what I term a 'universal' investment.  My 
choices are as follows.
-for the 'Canadian content' investment - iUnits S&P 500 RSP E.T.F., 
traded on the Toronto Stock Exchange (TSE), ticker symbol XSP, with a 
MER of 0.30%, and
-for the universal investment - iShares S&P 500 Index Fund, traded on 
Amex (IVV), with a MER of 0.09%.

What follows is pretty boring and irrelevant stuff, unless you're a 
Canadian who has to jump through all the Canadian-content rules imposed 
by the Canadian government.  Canadians can buy and invest in U.S. stocks, 
including ETF's.  However, Canadians cannot buy nor invest in U.S. mutual 
funds at all, whether for retirement purposes or for just general invest-
ment.  This is to make sure Canadians can only buy mutual funds with fees 
three to ten times higher than the average U.S. funds, well, you now, 
we don't really want to be richer than our yankee friends, now do we?  
According to globefund (, a Canadian web site similar 
to Morningstar), there are 184 index funds available in Canada.  Of 
these, this is the range of mer's:
-10 have a mer of	-53  2.5-2%, 		- 42     1-.5%, and 
    3% or more,		-9   2-1.5%, 		- 22     with a MER of  
-34  3-2.5%, 		-14  1.5-1%,	 	 _____ 	 .50% or less .
						 184  Total
Of these last 22, 10 are U.S. equity funds, 7 of which track the S&P500 
(see table following).  There are a total of 14 ETF's traded on the TSE.  
Only one of these tracks the S&P500: iUnits S&P 500 RSP E.T.F.  However, 
the two S&P500 ETF's traded on Amex can be purchased by Canadians, for 
retirement (subject to the 70-30 rule - see following), or other purposes.

If I were to choose a fund rather than an ETF, I don't really have many 
good choices, as the Canadian government says it is illegal for Canadians 
to invest in U.S. mutual funds; only funds made and administered in Canada 
will do for us canucks (aren't we lucky).  The two best choices (Imperial 
Life Pool US Index-Plus 1 (mer=.18%), and Quebec Professionals American 
Index (mer=.10%)) are restricted to special groups, and not available to 
the general public.  The next best Canadian-content fund is the TD U.S. 
RSP Index-e (mer=.48%), 60% more expensive than the iUnits (mer=.30%).  
The next best 'universal' funds, Royal Premium U.S. Index (mer=.30%) 
and TD U.S. Index (US$)-e (mer=.31%), have a mer more than three times 
(read 233% higher!) that of the 'universal' iShares S&P500 IndexFund 
(IVV, mer=.09%).  Additionally, the Royal Premium fund requires a 
minimum investment of $250,000 (Canadian dollars) (for this you pay a 
lot extra)!  However, in their favour, all these funds are no load, 
and can be purchased without any commission charge.

I'm selecting the ETF's over the funds not just because of the difference 
in mer's.  I tend to make one investment/contribution a year, of about 
$3000-5000 (Canadian).  At current prices (XSP=$18CDA, IVV=$118U.S.), 
my commission is about $35/trade, representing a cost of 1.0-0.7%/trade.  
Over a ten-year period, ten trades X $35 = $350 cost, spread out over 
an average portfolio of $20,000 (10 X $4,000/2), amounts to a total 
cost of 1.75%, or .175%/year.  This .175% needs to be added to the mer, 
bumping the cost of XSP up to.475%, and the cost if IVV up to .265%. 
[Is my arithmetic correct?] Even with these bumped-up costs, XSP and 
IVV are still the best choices available to me (see table following).  
And if the commissions go down, or I am able to purchase more than 
$4000/yr., this bumped-up cost gets smaller (in percentage terms).  
And as my investment itself grows (excluding the annual contributions), 
this also contributes to the $35 annual trade-commission shrinking in 
percentage terms.

Seventy percent of my investments in my retirement account (RRSP, 
the Canadian equivalent to a 401(k)) must be in Canadian investments 
(hey, that makes sense, Canada represents about 3% of the total world 
economy, so the Canadian government forces Canadians to invest 3%, 
oops, sorry, I mean 70%, of their retirement savings in 3% of the 
world's economy - once again, screwed by those clowns in Ottawa).

The following data summarize the choices of index funds/ETF's with a 
mer of .5% or less, available to canucks.  They are grouped into Canadian-
content and universal funds/ETF's, sorted by mer's (lowest/best to 
highest), within each group.
Ranked (within group) by MER (lowest/best to highest)
Group 1: Canadian-content investments
Imperial Life Pool US Index-Plus 1	Fund	0.18	1997	(only 
					available to group clients)
iUnits S&P 500 RSP E.T.F. (XSP-T)	ETF	0.30	2001
iUnits S&P 500 RSP E.T.F. (incl. comm)	ETF	0.475	2001
TD U.S. RSP Index - e			Fund	0.48	1999
Altamira Precision U.S. RSP Index	Fund	0.50	1998
Group 2: 'Universal' investments
iShares S&P 500 Index Fund (IVV)	ETF	0.09	2000
Quebec Professionals American Index	Fund	0.10	2000	(only 
			available to specified professionals in Quebec)
Spiders (SPDRs) (SPY)			ETF	0.12	1993
iShares S&P 500 Index Fund (incl. comm.)ETF	0.265	2000
Royal Premium U.S. Index		Fund	0.30	1998
TD U.S. Index (US$) - e			Fund	0.31	1999
TD U.S. Index - e			Fund	0.31	1999 (Amex ETF's - 
Exchange Traded Funds (ETFs) on Broad-Based Indexes)

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