Every month, I love reading Ken Kivenko’s Current News.

In the February 2006 issue, he says

“Fund Factoid: The average MER of a Dividend fund is about 2.55 % [median 2.37%] with some funds as low as 1.1 % albeit with higher minimum investment amounts. Interest income and foreign dividend income is typically allocated to pay for fund expenses before tapping into the more tax-advantaged Canadian dividend income or realized capital gains. Nevertheless, the fact that dividend yields on stocks approximate the MER, most of your returns from dividend funds likely won’t come from dividends.”

Hmmm. Let me sit back and think about that. Let me list a random sampling of dividend paying stocks that I own and their current dividend yields as of today:

Stock Current Price Yield

BMO      $69.02   2.84%

BNS      $47.95   2.84%

EMA      $19.93   4.41%

ENB      $36.13   3.10%

Hmmm. Considering that the average MER is 2.55%, who is actually earning the dividends from these companies?? I am very glad that I am a dripper! No fees for me!

I will be discussing DRiPs (dividend reinvestment plans) in a future article. In the meantime, there is an excellent article over at A Frugal Focus on dripping. Check it out.