What Does Management Fee Mean?
A management fee is the expense levied by asset managers. This fee allows them to compensate themselves for both their specialized professional skills and abilities, as well as the time spent on managing the assets. The fee may be comprised of the cost of asset administration as well as the investor communications. It is generally levied as a percentage of the value of assets managed, or as a percentage of revenue, subject to a certain minimum value, although other fee structures are also frequently found.
A management fee is an important feature of both professional investment management as well as asset/wealth management services. By comparing the fund fee of various mutual funds along with their track record, the investor can select an efficient fund.