One of the biggest benefits to investing in mutual funds is the team of professionals that are there to manage the portfolio. Fund managers follow market opportunities, looking for ways to maximize returns while mitigating risk so they can make the best investment decisions on behalf of their investors.
The cost for this expertise is reflected in the Management Expense Ratio (MER). MERs vary depending on the fund, but they are not charged to investors directly. Instead, they are embedded, and charged directly to the fund based on the fund's assets. MERs reduce the fund's return.
- Management Fees:
These include portfolio management fees and trailing commissions. Portfolio management, paid to the investment management firm, includes research, investment and professional management. Trailing commissions, paid to the fund dealer servicing your account, include ongoing advice, customer care and compliance.
- Operating Costs:
These cover the mutual fund's accounting, audit costs and record keeping.
GST and QST or HST.
1 Mutual Funds Representatives with TD Investment Services Inc. distribute mutual funds at TD Canada Trust.