Total Annual Fund Operating Expenses

DEFINITION of 'Total Annual Fund Operating Expenses'

For a mutual fund or other type of fund management structure, the aggregate of the funds operating costs. Total annual fund operating expenses illustrates the total costs incurred by the fund itself over the course of a year in operating and running the fund. Such expenses would include the management fee and distribution fee.

BREAKING DOWN 'Total Annual Fund Operating Expenses'

A fund's total annual fund operating expenses is a requirement by the SEC for all mutual and exchange-traded funds on their respective prospectus documents. By clearly laying out the expenses a fund must cover in order to simply continue operations, potential investors can decide whether they want to invest in a firm which incurs a level of expenses, which typically presented as a percentage of average net assets.

RELATED TERMS
  1. Expense Ratio

    A measure of what it costs an investment company to operate a ...
  2. Fund Of Funds

    A mutual fund that invests in other mutual funds. This method ...
  3. Capped Fund

    A mutual fund that has a limited amount of operating expenses ...
  4. Before Reimbursement Expense Ratio

    The percentage of a fund's average net assets that is used to ...
  5. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected ...
  6. Expense Limit

    A limit placed on the operating expenses incurred by a mutual ...
Related Articles
  1. Mutual Funds & ETFs

    Expense Ratio

    Expense Ratio
  2. Options & Futures

    Overview Of Mutual Fund Expenses

    By Richard Loth (Contact | Biography)"In the mutual fund field, costs assume a tremendous importance for the long-term investor. Other things held equal, lower costs mean higher returns." -John ...
  3. Mutual Funds & ETFs

    5 Characteristics of Strong Mutual Fund Shares

    Discover some of the basic characteristics shared by good mutual funds that investors can use to help them in selecting funds.
  4. Investing Basics

    4 Expensive Mutual Fund Mistakes to Avoid

    Mutual funds are a good way to balance your asset allocation but there some potentially expensive pitfalls investors need to be aware of.
  5. Mutual Funds & ETFs

    Trading Mutual Funds For Beginners

    Learn about the basics of trading and investing in mutual funds. Understand how the fees charged by mutual funds can impact the performance of an investment.
  6. Investing

    Advising FAs: Explaining Mutual Funds to a Client

    More than 80 million people, or half of the households in America, invest in mutual funds. No matter what type of investor you are, there is bound to be a mutual fund that fits your style.
  7. Retirement

    Analyzing The Best Retirement Plans And Investment Options: Mutual Funds

    What they are: A professionally managed pool of stocks, bonds and/or other instruments that is divided into shares and sold to investors. Pros: Diversification; liquidity; simplicity; ...
  8. Mutual Funds & ETFs

    Mutual Funds: Management Fees Vs. MER

    Having a clear understanding of the fees charged by a mutual fund is a significant component to making an informed investment decision. Often the management fee is used interchangeably with the ...
  9. Professionals

    Fund of Funds Investing

    CFA Level 1 - Fund of Funds Investing. Learn the characteristics of the fund of funds investing style. Discusses the benefits and drawbacks of this type of fund
  10. Mutual Funds & ETFs

    Mutual Funds Are Awesome - Except When They're Not

    This investment is very popular, but that doesn't mean it comes without risk.
RELATED FAQS
  1. Do mutual fund trading costs hurt your bottom line?

    Find out how a mutual fund's expense ratio could be eating into your bottom line, what costs are included and an example ... Read Answer >>
  2. When is an expense ratio considered high and when is it considered low?

    Discover what is considered an exceptionally high or low expense ratio for a mutual fund or ETF, and learn why this figure ... Read Answer >>
  3. Why is a mutual fund's expense ratio important to investors?

    Understand the nature of mutual fund expense ratios, and learn why it is critically important for investors to be aware of ... Read Answer >>
  4. Why do index funds tend to have low expense ratios?

    Understand what an index fund is and why the nature of index funds causes them to have lower expense ratios than more actively ... Read Answer >>
  5. How do I judge a mutual fund's performance?

    Evaluate mutual fund performance utilizing resources such as Morningstar; compare the fund with others in its peer group ... Read Answer >>
  6. How do I calculate the loan-to-value ratio using Excel?

    Learn what a mutual fund and a money market fund are, and understand the differences between each and how they serve various ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center