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Everyone loves ETFs to pieces, but did you know there’s an almost-as-good investing product that is friendlier to beginners and others who value streamlined simplicity?

The e-series of index funds from TD Asset Management have been around as long as I’ve been writing about personal finance, which is to say we both have a track record of some length. Bloggers blog about e-series funds and personal finance experts praise them, but the overall buzz is basically the sound of crickets.

Give e-series funds a look if you want a comparatively low-cost way to be an index investor. Exchange-traded funds might be cheaper on an all-in cost basis, but e-series funds have some things going for them: no cost to buy or sell, automatic reinvestment of dividends is available and you can get started for as little as $100. After that, there’s no minimum investment.

A change in policy last year means you have to open an account with TD Direct Investing to start an e-series account. No longer can these accounts be set up through TD’s EasyWeb banking portal. Existing e-series clients can continue to invest in these funds through EasyWeb, though.

If you’re a young investor or have a small starter account, watch out for TD Direct’s $25-a-quarter maintenance fee for accounts worth less than $15,000. One way to avoid the fee is to register your account for a preauthorized contribution of at least $100 a month to your funds. A foundation of investing success over the long term is making regular contributions to your account.

Fees for e-series funds are dirt cheap by mutual fund standards and somewhat pricey by ETF standards. The management expense ratio for TD Canadian Index Fund – e is 0.28 per cent, which compares with 0.06 per cent for some of the biggest Canadian equity ETFs. But some online brokers, including TD Direct, charge as much as $9.99 to buy and sell ETFs. If you put money in a few ETFs every month, your commissions will add up alarmingly.

The e-series lineup is not the absolute best way to invest, but it is a very good way that balances reasonably low costs with excellent convenience. A very strong option for the young startup investor.

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