Management Fee

AAA

DEFINITION of 'Management Fee'

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. It can also include other items such as investor relations expenses and the administration costs of the fund.

INVESTOPEDIA EXPLAINS 'Management Fee'

The management fee is the cost of having your assets professionally managed. The fee pays other people to select which securities your money (along with that of the other investors in the fund) is invested into, to do all the paperwork needed and to provide information about the fund's holdings and performance.

Management fee structures vary from fund to fund, but they are typically based on a percentage of assets under management. For example, a mutual fund's management fee could be stated as 0.5% of assets under management.

RELATED TERMS
  1. Performance Fee

    A payment made to a fund manager for generating positive returns. ...
  2. Fee Structure

    A chart or list showing the dollar amounts that a business charges ...
  3. Expense Ratio

    A measure of what it costs an investment company to operate a ...
  4. Hedge Fund

    An aggressively managed portfolio of investments that uses advanced ...
  5. Fund Manager

    The person(s) resposible for implementing a fund's investing ...
  6. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected ...
Related Articles
  1. Investing Basics

    Paying Your Investment Advisor - Fees ...

  2. Mutual Funds & ETFs

    Mutual Fund Basics Tutorial

  3. Mutual Funds & ETFs

    How do traders use the ABX index?

  4. Chart Advisor

    A Total Stock Market ETF For Any Portfolio

Hot Definitions
  1. Flight To Quality

    The action of investors moving their capital away from riskier investments to the safest possible investment vehicles. This ...
  2. Capitulation

    When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into ...
  3. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  4. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  5. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  6. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
Trading Center