The management expense ratio (MER), is often lower for an ETF because many ETFs are not 'actively managed,' meaning that their underlying investments are not selected based on a manager's outlook or assessment of these securities, but instead are selected so as to best track a benchmark, such as the S&P 500 or the S&P/TSX index. You don't pay these fees directly they get paid by the fund itself and are expressed as a percentage of the total value of the fund (it can be a range of less than 1% to more than 3%).
Another way ETFs and Mutual Funds differ are in their management fees and operating expenses.
