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.

  1. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...
  2. Securities And Exchange Commission ...

    A government commission created by Congress to regulate the securities ...
  3. Index Fund

    An index fund is a type of mutual fund with a portfolio constructed ...
  4. ETF Sponsor

    The company or financial institution which creates and administers ...
  5. Mutual Fund

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

    Making an investment to reduce the risk of adverse price movements ...
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