The management expense ratio (MER) is charged by a fund company before any returns are paid out to investors. The MER includes the portfolio manager's compensation and other expenses associated with running the fund. Management Fee + Fund Expenses = MER, which is stated as a percentage of the fund's average daily net asset value. MERs are calculated by adding the management fee to the accrued expenses (excluding brokerage and interest charges) and dividing the total by the fund's average net asset value for the relevant financial year.

The fees vary by fund company and fund type, with the lowest fees charged for money market and index funds, while sector and specialty funds are among the highest.

MERs are paid by the funds and are not charged directly to unitholders, but do reduce the available return. However, all published rates of return and unit prices have already accounted for these fees and expenses.

Management Fees

Management fees are usually a fixed percentage of the fund's average daily net asset value and cover the cost of professional portfolio management. The MERs for index funds tend to be quite low because the management fee component is considerably lower than for actively managed mutual funds.

Fund Expenses To top

Operating expenses include, but are not limited to, legal, audit, trustee, and custodial fees, as well as administrative, investor servicing, report, and prospectus costs. Mutual funds will also incur brokerage commissions, as well as interest charges. When gains are made through the sale of a security a tax liability is created.

The RSP or clone funds also pay transaction costs associated with the forward contracts and any other derivative instruments used to implement their investment strategy.

The actual amount of these expenses and the management fee are stated in the Simplified Prospectus as well as the Mutual Funds Financial Statements.

How are these fees paid? To top

To cover the MERs on our funds, Altamira deducts a small sum from each pool of fund assets on a daily basis. This approach ensures there will not be a large impact on the net asset value of the fund, as would occur if the amount were deducted in one lump sum.

Please note that these transactions will not appear as deductions from your individual holdings, nor will they appear on your statement of account activity.