Buying mutual funds economically: if you know what you want there are ways to save commission costs when buying mutual funds

Money Digest, April, 2001

If you are comfortable making your own decisions about mutual funds, then it makes sense to try to minimize the commissions you pay.

Investors who have an online account with a stock broker can simply buy mutual funds online for a small and even no commission.

Large online brokerage firms such as TD Waterhouse offer their customers a large selection of funds. However, some online brokerages offer clients a more limited selection.

If you are interested only in mutual funds, you can use dealers who specialize in mutual fund products and charge low or no commissions.

Examples of such dealers including Sterling Mutuals, Mutual Fund Direct and ASL Direct. All three dealers may offer different terms.

* Sterling Mutuals (Web site: www.sterlingmutuals.com; 1-800-354-4956) offers a wide variety of commission free funds with access to some 1,700 funds. You can also purchase Exchange Traded Funds, for a commission.

Sterling offers weekly and monthly research reports written by an in-house expert. You can also receive advice from their online asset allocation expert.

Sterling is currently available in Ontario, British Columbia and Manitoba. The company plans to expand into Alberta and Saskatchewan.

If you open a self-directed RRSP with Sterling with assets less than $50,000, Sterling charges an annual fee of $75 per year.

* Mutual Fund Direct (www.no loads.com, 1-800-268-1066).

* ASLDirect (www.asldirect.com, 1-800-404-4891).