What is a management fee?

A management fee is a charge levied by an investment manager for managing an investment fund. The management fee is intended to compensate the managers for their time and expertise for selecting stocks and managing the portfolio. It can also include other items such as investor relations (IR) expenses and the administration costs of the fund .

How much does a portfolio management fee cost?

Management fees can also cover expenses involved with managing a portfolio, such as fund operations and administrative costs. The management fee varies but usually ranges anywhere from 0.20% to 2.00%, depending on factors such as management style and size of the investment.

What is the difference between Mer and management fee?

Recall that management fees are paid to the investment professionals that manage the investments and can cover other expenses, such as fund operations and administration. On the other hand, the MER includes the management fee, as well as other costs associated with running an investment fund.

Why do mutual funds charge management fees?

Mutual funds charge management fees to cover their operating costs, such as the cost of hiring and retaining investment advisors who manage funds' investment portfolios and any other management fees not included in the other expenses category. Management fees are commonly referred to as maintenance fees.