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Introducing the Freedom 0.15 Portfolio, a friend to DIY and advised investors alike.

Freedom 0.15 is built with just three exchange-traded funds that combine in a diversified portfolio to produce a weighted average management expense ratio of 0.15 per cent. That's 15 cents in fees for every $100 you invest. An optimist might say that fees this cheap nearly round down to zero. You're almost free from fees, in other words.

The low costs of Freedom 0.15 have been made possible by the intense competition that has been going on in Canada's ETF sector for the past year or so. This portfolio benefits from not only competition on fees, but also on product selection.

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On one hand, ETF companies are getting a bit too cute in the concocted indexes and strategies on which they're basing new products. But mixed into this clutter are some useful developments, most notably "everywhere but Canada" global equity funds. One of these products has been chosen for the Freedom 0.15 Portfolio – the iShares Core MSCI All Country World ex Canada Index ETF (XAW), which offers exposure to 99 per cent of the world stock market outside Canada. The MER for this still-new ETF is an estimated at 0.25 per cent, very cheap for this category of fund.

For bonds, let's use the Vanguard Canadian Short-Term Bond Index ETF (VSB), which offers defensive exposure to the bond market and has a low MER of 0.15 per cent. For Canadian stocks, we'll add the BMO S&P/TSX Capped Composite Index ETF (ZCN). The MER for this fund is 0.09 per cent.

Here's the asset weight for the Freedom 0.15 Portfolio: 35 per cent VSB, 40 per cent ZCN and 25 per cent XAW. The weighted average MER for the three ETS is 0.15 per cent. That's a minimal cost for DIY investors, and it lightens the load considerably for investors in fee-based advisory accounts. The total cost of investing in these accounts is the advice fee, usually 1 to 1.5 per cent, plus the cost of investments. With Freedom 0.15, that latter cost is pretty much the cheapest possible.

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