1. What is Management Expense Ratio (MER)?

Definition: MER represents the percentage of a fund's assets that are used to cover operating expenses annually.

Purpose: It helps investors understand the cost of owning a mutual fund or ETF and compare costs between different funds.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( MER \) — Management Expense Ratio (percentage)
• \( \text{Total Fund Expenses} \) — Annual operating costs (USD)
• \( \text{Average Net Assets} \) — Average value of fund's assets (USD)

Explanation: The ratio shows what percentage of the fund's assets is used to cover management fees and operating expenses each year.

3. Importance of MER Calculation

Details: Lower MERs mean more of your investment remains invested. Even small differences in MER can significantly impact long-term returns.

4. Using the Calculator

Tips: Enter the fund's total annual expenses and average net assets (both in USD). Both values must be > 0.

5. Frequently Asked Questions (FAQ)

Q1: What's a good MER for a mutual fund?
A: Typically, 0.5%-1% is good for actively managed funds, while index funds often have MERs below 0.25%.

Q2: Does MER include all fund costs?
A: MER includes management fees and operating expenses but not trading costs or sales charges.

Q3: How does MER affect my returns?
A: MER is deducted from the fund's returns annually. A 2% MER means you pay $20 annually per $1,000 invested.

Q4: Where can I find a fund's MER?
A: Check the fund's prospectus, fact sheet, or financial websites that track fund information.

Q5: Can MER change over time?
A: Yes, funds may adjust their MERs, though changes are typically small year-to-year.