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ETFs provide diversification in rocky markets.Getty Images/iStockphoto

As a rule, exchange-traded funds are the cheapest way for investors to get diversified exposure to major markets.

But let's not give the entire ETF business a free pass as fee-friendly to investors. There are quite a few funds out there with fees that seem out of whack with their mission. Here are a few examples I rounded up:

- The BMO S&P/TSX Equal Weight Banks Index ETF (ZEB): The management expense ratio for this very large $779-million dollar fund is 0.62 per cent. Look, ZEB is a highly efficient way to buy equal weightings in the Bix Six banks. But the management expense ratio (MER) is a bit outrageous when you consider the BMO S&P/TSX capped composite index ETF (ZCN) has an MER of 0.06 per cent. ZCN has 235 stocks to keep in balance, ZEB has six.

- The iShares Canadian Financial Monthly Income ETF (FIE): This $325-million fund holds banks plus insurers and investment firms and has some merits, as I discussed in this recent column. But the MER is extremely steep at 0.85 per cent. That's starting to get close to mutual fund territory.

- First Asset Morningstar Canada Dividend Target 30 Index ETF (DXM): This is a representative choice from among a growing number of ETFs that use a rules-based system for investing in a particular market niche. The fees are typically high – the MER here is 0.67 per cent – and the results vary widely. Here, returns have lagged the S&P/TSX composite total return index over the past four years.

- iShares S&P/TSX Capped Utilities Index ETF (XUT): Capitalizes on investor preference for safe sectors like utilities with a hefty MER of 0.63 per cent. There are just 15 stocks in the portfolio.

- Purpose Total Return Bond Fund (PBD): A 0.79-per-cent MER for a bond fund in today's low-rate world is expensive, especially when the fund's holdings are four other ETFs and returns have been unencouraging.

- Horizons Active Global Dividend ETF (HAZ): Great returns, but the MER of 0.91 per cent could be a burden in leaner times.