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. Fund Manager

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

    An investment vehicle that is made up of a pool of funds collected ...
  5. Layered Fees

    Two sets of management fees that are paid by an investor for ...
  6. Fiduciary Risk

    A type of risk that accounts for the possibility of a trustee/agent ...
Related Articles
  1. Paying Your Investment Advisor - Fees ...
    Investing Basics

    Paying Your Investment Advisor - Fees ...

  2. Mutual Fund Basics Tutorial
    Mutual Funds & ETFs

    Mutual Fund Basics Tutorial

  3. Human Capital, An Important Asset For ...
    Investing Basics

    Human Capital, An Important Asset For ...

  4. Don't Be Misled By Investment Advertising
    Home & Auto

    Don't Be Misled By Investment Advertising

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center