What is a management fee?

The fee is intended to compensate managers for their time and expertise in selecting stocks and managing the portfolio. It can also include other charges such as investor relations (IR) expenses and the administration costs of the fund. Management fees are the cost of having an investment fund professionally managed by an investment manager.

How is the management fee calculated?

The management fee is typically calculated as a percentage of the total assets under management. This means that as the value of your investment portfolio grows, the management fee charged will also increase. However, the percentage charged may vary depending on the investment product and investment manager.

How much does a fund management fee cost?

Fees tend to range from 0.10% to more than 2% of AUM. A management fee is the cost of having your assets professionally handled. The fee compensates professional money managers as they select securities for a fund’s portfolio and manage it based on the fund’s investment objective.