About fees: Management expense ratios explained

 

When you invest in a mutual fund, you and everyone else invested help pay for the expertise and administration to manage that fund. This fee is known as the management expense ratio (MER). The MER is collected at the fund level, meaning it is deducted from the fund’s assets before returns are calculated.

Below are some examples of the services and expenses that may be covered by the MER at your mutual fund company:

  • Ongoing professional portfolio management.

  • Research and analytic support.

  • Administrative costs.

  • Distribution costs, including trailing commissions.1

  • Legal, audit and custodial fees.

  • Filings with the provincial securities commissions.

  • Regulatory costs: Financial reporting, simplified prospectus, Fund Facts.

  • Pricing and bookkeeping.

  • Employee salaries.

  • Marketing costs.

MERs Infographic

Your financial advisor can provide you with a variety of services and professional guidance to meet your financial objectives.



* The MER is annualized and is the total of the Fund’s management fee, fixed administration fees (if applicable), other operating expenses and HST. The illustration is based on a Series B fund.

1 The investment fund manager pays a portion of the management fee to your dealer firm for the services and advice that the dealer provides to you on an ongoing basis. The portion of the management fee that the dealer receives is called a “trailing commission” and is paid regularly by the fund company for as long as you own the fund. Commissions and trailing commissions are not paid on Series F and P.

Each series will have its own MER. Fees are calculated as a percentage of the net assets of each series of a fund and are accrued daily and paid monthly. The management and advisory fee is subject to HST and other applicable taxes.

In some cases, the MER is one aspect an investor should consider when contemplating purchasing a mutual fund. It is important to determine how well suited the investments are to your objectives and risk profile, and whether the fund will satisfy your long-term financial goals.

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This site is for persons in Canada only. Mutual funds sponsored by Fidelity Investments Canada ULC are only qualified for sale in the provinces and territories of Canada.

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