The fight for the low-cost crown continues in Canada. On June 2, BMO Global Asset Management filed a material change report that detailed a reduction to management fees on its balanced ETF series. This cut might be small in absolute terms—investors would save the equivalent of $3 per $10,000 invested—but it represents a push from fund providers to court cost-conscious investors.
Canadian-domiciled balanced ETFs have been in this spot before. Vanguard’s entrance in 2018 came in at a significant discount to the next-cheapest option, spawning similar strategies in subsequent years from firms like iShares and Mackenzie—something we have written about previously. Global X boasted a management expense ratio of 0.14% in 2020, which climbed to 0.20% by the end of 2024. BMO’s current 0.15% management fee matches that of TD’s All-in-One ETFs, potentially setting up another fight for flows.
Fees Are Important, but Other Considerations Matter
Fees are a major component of Morningstar’s Medalist Ratings, but they’re not everything. Our forward-looking measures also consider the team and process behind a strategy’s construction. BMO’s allocation ETFs each earn a Bronze Medalist Rating.
The series is eclipsed by Vanguard’s more well-rounded take. The fixed-income sleeve has a global flavor compared with BMO’s North-American-focused bond component. Vanguard’s allocation team also make their stamp, with the most noticeable contribution being a slight uptick in Canadian equity (30%) compared with the average global balanced fund (25%). While it does come at a slight premium at 24 basis points, the series earns a Medalist Rating of Silver across the five options.
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