There are incidental costs associated with owning investments. Some are worth paying, others aren't.

For example, mutual fund management expenses are typically expressed as the Management Expense Ratio (MER), and can go as high as 4% or more in the case of some specialty funds. If a Canadian Equity fund manager simply goes and buys the 'standard' blue chip issues associated with underlying stock indices, there is no valid reason to pay 2.5% for the privilege. Far better to just buy iShares, with an expense ratio of under 0.2%.

There are some mutual funds that follow the same value approach as I prefer to follow, and I unhesitatingly recommend these to my clients. In these cases, the fees are paying for something of value to investors - a disciplined, proven approach to investing.

I like to use other investment vehicles as well. One of my favorites is closed-end funds. These vehicles generally have MERs of around 1%, offer professional management and diversification, can be bought and sold on an exchange like a stock, and, as a kicker, often trade at a discount to their underlying net asset value. Closed-end country funds are a cheap and efficient means of entry into those markets, as are closed-end foreign bond funds.