Management Fee


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.

BREAKING DOWN '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.

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  1. Why do mutual fund companies charge management fees?

    Mutual funds charge management fees to cover their operating costs, such as the cost of hiring and retaining investment advisors ... Read Full Answer >>
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    High net worth individuals (HNWIs) often prefer fee-based investment accounts for reasons that include reduced conflicts ... Read Full Answer >>
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    A no-load mutual fund does not have a sales charge, called a "load" in investment jargon, but that does not mean it has no ... Read Full Answer >>
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  5. How often are mutual fund prices updated?

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    A mutual fund can be opened under the name of a minor through a custodial account overseen by a guardian. The custodian holds ... Read Full Answer >>

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