Fee Compression Pushes MERs Even Lower for Canadian Nasdaq-100 and TSX 60 ETFs

A long-standing challenge in the ETF industry, which is full of nearly identical products, is figuring out how to choose one fund over another. You could pick whichever ticker symbol you like best, but that is hardly a sound approach.

For ETFs that track the same benchmark, such as the S&P/TSX 60 or the Nasdaq-100, I focus on two key factors: fees and tracking error.

Fees are simple to understand. The management fee plus operating expenses form the management expense ratio (MER), which is deducted from returns every year. Lower is better. If two ETFs track the same index and all else is equal, the cheaper one will almost always deliver higher returns over time.

Replication quality also matters. Tracking error measures how closely an ETF follows its benchmark. For example, if an index returns 11% annually over 10 years but the ETF earns only 10.5%, that 0.5% gap represents tracking error.

While fees explain most of this difference, other factors contribute, including trading friction, withholding taxes, and portfolio turnover. The best ETF providers keep these costs low through efficient trading and sometimes by using securities lending programs that recover part of the expenses.

The fee trend is the most notable, though. As of November 3, the Cboe Canada ETF screener lists 1,840 ETFs, and that number keeps growing. The sheer variety has triggered a new wave of fee compression, especially among funds tracking major indices.

This is most visible at Global X Canada, which has recently cut management fees on its flagship Nasdaq-100 and TSX 60 ETFs. For Canadians invested in or considering either benchmark, these lower fees make two Global X ETFs worth a closer look.

Global X NASDAQ-100 Index ETF (QQQX)

For Nasdaq-100 exposure, QQQX is likely to be the cheapest option in Canada. I say “likely” because the most recent MER is only updated through June 30, 2025, and does not yet reflect the latest fee reduction.

Before the change, QQQX charged a 0.25% management fee and another 0.03% in expenses, for a total 0.28% MER. Effective October 7, Global X Canada reduced the management fee to 0.15%.

Assuming other expenses remain the same, the updated MER should come in around 0.18%, which would make it one of the most competitively priced Nasdaq-100 ETFs on the market.

The difference becomes clear when compared to rivals. Both the BMO NASDAQ 100 Equity Hedged to CAD Index ETF (ZQQ) and the iShares NASDAQ 100 Index ETF (CAD-Hedged) (XQQ) charge 0.39%, while even the previous cost leader, the Invesco NASDAQ 100 Index ETF (QQC), sits at 0.21%.

Otherwise, QQQX is about as plain vanilla as it gets for Nasdaq-100 exposure. The fund is well-capitalized with $468 million in assets, offers a 0.12% trailing 12-month yield paid annually, and provides tax-efficient exposure to the largest non-financial U.S. companies.

It is not currency-hedged, but for long-term investors, that should not matter much, as short-term exchange-rate noise tends to even out over time.

Global X S&P/TSX 60 Index ETF (CDNX)

The same story applies to CDNX, where Global X Canada has once again undercut the competition. The ETF originally charged a 0.13% management fee, but the firm has waived it entirely until December 31.

The official MER as of June 2025 is 0.07%, yet all MER-related costs, including operating expenses are currently fully waived, making CDNX temporarily fee-free for investors.

That is a major advantage when you compare it to other S&P/TSX 60 ETFs. The iShares S&P/TSX 60 Index ETF (XIU)—the first ETF ever launched—still charges a 0.18% MER. The newer BMO S&P/TSX 60 Index ETF (ZIU) is somewhat better at 0.15%, but still more than double CDNX’s MER before the waiver.

For investors looking for core Canadian equity exposure, CDNX offers a cost-effective, diversified option. The fund pays a 2.49% trailing 12-month yield, primarily composed of eligible dividends, and distributes quarterly. For long-term investors, it is one of the cheapest ways to own the Canadian market.