The Net Asset Value (NAV) of a mutual fund is the price at which units of a mutual fund are bought or sold after deducting all expenses. Management fees and operating expenses make up a mutual fund’s management expense ratio (MER) which is expressed as a percentage per year. In practice, the MER is calculated and charged to the mutual fund daily. While you don’t pay these expenses directly, the MER is deducted from the total value of the mutual fund’s portfolio before the NAV is calculated.
You can find information about fees in a mutual fund’s Fund Facts and in its simplified prospectus. By law, a mutual fund company must prepare and file these disclosure documents with the securities regulator.
Visit GetSmarterAboutMoney.ca to learn about mutual funds and use the mutual fund fee calculator to see how fees and other costs affect your mutual fund investments. Speak with a registered financial representative for advice to fit your personal financial situation.