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MANAGEMENT EXPENSE RATIO: WHERE YOUR MONEY GOES

Financial institutions are now required to provide more detail to investors about the fees and compensation we collect. This includes showing part of the management expense ratio (MER).

At MD, we disclose information about the entire MER—not because we have to, but because we believe it’s the right thing to do.

WHAT MD IS REQUIRED TO DISCLOSE
All trailing commissions paid to the dealer throughout the year, in dollars.

  • Trailing commissions

THE MD DIFFERENCE: INVESTMENT FEE TRANSPARENCY
We go beyond the minimum disclosure requirements and provide you with information about all the fees and compensation associated with your investments.

  • $0 Trailing commissions1
  • Investment management fee
  • Operating costs
  • Taxes
  • Total MER

Let’s take a closer look...
An MER tells you how much it costs to invest in a mutual fund, as a percentage of your assets.

When you invest $100,000 in a mutual fund, your MER consists of:

MD PRECISION MODERATE BALANCED PORTFOLIO™
1.58% or $1,580 per year

AVERAGE INDUSTRY PORTFOLIO2
2.09% or $2,090 per year

MD’s MERs are on average 30% lower than others in the industry3

Here’s How the MER Breaks Down:
MD PORTFOLIO
Investment management fee and distribution services4: $1,300
Operating costs5: $130
Taxes6: $150
$0 Trailing commissions1

Versus

AVERAGE INDUSTRY PORTFOLIO2
Investment management fee4: $790
Operating costs5: $100
Taxes6: $200
Trailing commissions7: $1,000

WHAT YOU GET FOR WHAT YOU PAY

Investment Management Fee and Distribution Services
The costs incurred by the fund manager to oversee your investment(s)

At MD this includes:

  • Manage the MD mutual funds you buy
  • Provide accounting and legal services, unitholder recordkeeping and other fund servicing functions
  • Guiding a fund’s strategy and selecting leading global investment managers
  • Preparing and filing regulatory documents and arranging for custodial and external audit services

Operating Costs
Physician-focused advice from a financial consultant

At MD this includes:

  • Offering secure virtual meetings at a time convenient to you
  • Assessing your risk tolerance and helping you establish financial goals
  • Keeping detailed records about your account
  • Providing objective, personalized financial advice
  • Meeting your personal insurance, tax and estate planning needs

Better Value for You

MD is the only financial services firm exclusively dedicated to the financial well-being of Canada’s physicians.

Because MD is owned by the Canadian Medical Association (CMA), a portion of any profits we generate is paid to the CMA in the form of a dividend. This money goes toward advocacy and other physician-centred programs—benefiting CMA members like you.

Physician-focused services + low investment fees = outstanding value.

That’s the MD Difference.

1 Compensation paid to dealer to provide services and expertise on your account. MD Advisors are salary based. They do not earn commission, which means they are able to provide objective financial advice that is best-suited for you and your goals.

2 Source: Asset-weighted MERs, Investor Economics, reflecting data ending December 31, 2015.

3 MD compared the management expense ratio (MER) for MD mutual funds and Precision Portfolios ™ with the average mutual fund MERs for comparable funds, using data from Investor Economics as of June 1, 2016.

4 Compensation for portfolio management team, research and compliance, and salaries of employees like your MD Advisor.

5 Custodial fees, auditing, investment fund accounting, legal, regulatory, unitholder recordkeeping and other fund servicing costs.

6 GST or HST charged on fees and services.

7 The typical trailing commission is based on the most common trailing commissions for no-load, 5 actively managed balanced funds offered through advisors (often referred as Series A). Most often, the trailing commission for Series A balanced funds varies from 0.5% to 1.0%, depending on the load structure of the product. Fixed-income funds may pay a lower trailing commission.

MD Financial Management provides financial products and services, the MD Family of Funds and investment counselling services through the MD Group of Companies. For a detailed list of these companies, visit md.cma.ca.

MD Financial Management Inc. is owned by the Canadian Medical Association.

MD ExO® and MD Precision Portfolios™ are trademarks of the Canadian Medical Association, used under licence.