Why is the MER higher than for mutual funds?
Venture capital investment in eligible Canadian health businesses requires a greater commitment to investment analysis than investments in most other securities. The biotechnology industry is complex and requires a great deal of research and due diligence to identify the potential risks and rewards of an investment. In addition, the cost to determine the value of the CMDF funds’ assets for which no published market exists will be greater than valuation costs for mutual funds that invest primarily in listed securities. Consequently, the operating expenses of the CMDF funds will likely be substantially higher than those of many mutual funds and other pooled investment vehicles.
