Management expense ratio (MER) represents the annual fees and expenses charged to the fund as a percentage of its average assets. The MER covers the costs of managing the fund, including investment management fees, administration, operational expenses and taxes other than income taxes; trading costs aren’t included and are shown separately as the trading expense ratio (TER). In segregated funds, the MER may also include the cost of guarantees, such as maturity and death benefit guarantees, which offer additional protection to investors.
Key aspects of MER include:
Annual fee
Expressed as a percentage of the fund’s assets.
Covers fund costs
Includes management, administration, and operational fees.
Impact on returns
Directly reduces the fund’s net returns to investors.