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Analysis: This is a fund that is meant for mutual fund investors who are seeking a low cost way to gain exposure to the international equity markets. It is designed to track the Morgan Stanley Capital International Europe, Australasia and Far East Index less management fees. Because of this, the fund will have no exposure to U.S. or Canadian based companies.
Fund performance hasn’t been as compelling for this index fund as it has been with the TD Canadian Index and the TD U.S. Index Fund. Part of that will have to do with the fees that are charged. The Investor Series units of the fund have an MER of 1.38% while the e-Series units carry an MER of 0.50%. While the fees are below the category median, they are still relatively high for an index product, in our opinion.
There is also a currency hedged version available which hedges the currency exposure of the fund. For those investors who wish to remove the currency impact out of their portfolios, that may be an option to consider.
While the cost may be lower than with an actively managed global or international equity fund, we would prefer an actively managed fund over this one in virtually all market conditions. However, for mutual fund investors only concerned with cost, this fund is an option.