Do Canadians need to sharpen their investment fund literacy?

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In the face of the pandemic’s profound impact, seven tenths (69%) of respondents with an existing RRSP said they plan to contribute at least as much to their RRSP this year as they did in 2020. For TFSA holders, 85% said they plan to contribute the same amount or more than they did last year.

With more Canadians taking the long view, there appears to be a rising interest in ensuring that investments go further. Forty-four per cent of those surveyed said they’re actively seeking lower fee options this RRSP season, while 39% are aiming to get better returns by investing more this year.

“The findings may reflect the current low interest rate environment that we’re experiencing,” said Edward Kholodenko, president and CEO, Questrade. “Of note, this year’s research showed continuing concern — and outright lack of knowledge — regarding fees, mutual funds, and the option of ETFs.”

One question revealed an apparent lack of knowledge on mutual fund fees. When asked if a 2% fee for a mutual fund is high, 51% agreed, while 38% of respondents said they did not know. Among those who invest in mutual funds currently, nearly 1 in 2 admitted they do not know what fees they are paying for their mutual funds.

With respect to their openness to investing in ETFs, 21% of poll respondents said they were more open, including 11% who said the lower fees would let them keep more of their money, 9% who said they wanted to try investing in them after just recently becoming aware of them, and 6% who believe ETFs are the new, better way to invest.