What are Management Expense Ratios?
Here is a video I made to explain what Managed Expense Ratios are. Enjoy!
What are Management Expense Ratios?
Management Expense Ratios or MER is what you pay for owning a fund.
It is taken off the top of the total funds value as a percentage.
It goes towards the administration, management and advertising cost to run a fund.
Managed funds, like mutual funds tend to have higher MER rates, typically in the 2-3% range.
This means you could actually lose money on an investment due to management costs.
Why to avoid Managed Funds
Managed funds have high overhead, so the MER on the fund is high.
MER eats directly into the value of your fund. It should always be avoided.
Funds with a high MER rarely outperform funds with a low MER.
Stay away from high MER investments!
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@cryptoindex I think we call it "expense ratio" mainly applicable in Mutal fund investments.. In Regular plan we have to pay high expense ratios while we prefer the direct plan its very low as compared to the regular.
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