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MUTUAL FUND FEE STRUCTURE - Coggle Diagram
MUTUAL FUND FEE STRUCTURE
Management Company Fees (Investment Manager / AMC)
INVESTMENT MANAGEMENT FEE
Base Management Fee
Charged as % of AUM
Tiered or flat schedule
Accrued daily, paid monthly/quarterly
Performance Fee (if applicable)
Linked to benchmark or hurdle rate
High-water mark or clawback provisions
Symmetric (share gains/losses) or asymmetric
ADMINISTRATIVE FEE
NAV Calculation
Accounting & Bookkeeping
Financial & Regulatory Reporting
Compliance & Risk Management Support
Fund Operations & Support
Fund Accounting System Costs
Trade Order Management & Execution Support
Portfolio Compliance Monitoring
Legal & Regulatory Filings (prospectus, KIID, etc.)
Overhead Allocation
Research Costs (internal analysts, data terminals)
Technology & Systems
Office & Operational Infrastructure
Paid From
Gross fund assets (reduces fund returns)
Disclosed As
Management fee line item in prospectus
Part of Ongoing Charges / TER / Expense Ratio
Distributor Fees (Distribution / Sales / Marketing)
Distribution / Service (12b-1 or equivalent)
Marketing & Promotion
Advertising & Brand Campaigns
Roadshows, Seminars, Webinars
Marketing Materials (factsheets, brochures, digital)
Distribution Platform Fees
Shelf Space Fees to Platforms / Supermarkets
Revenue Sharing with Intermediaries
Shareholder Servicing
Call Center & Client Service
Account Maintenance & Recordkeeping Support
Sales Loads (Front-End Load)
Initial Sales Charge
Paid by investor when buying fund
% of subscription amount
Breakpoints for large investments
Dealer Concessions
Portion of load paid to intermediaries
Sales Loads (Back-End Load)
Deferred Sales Charge (CDSC)
Paid when investor redeems shares
Declining scale over time
Incentive to hold for longer period
Platform / Distribution Arrangements
Bank & Broker Distribution Agreements
Independent Financial Advisor (IFA) Fees
Online Platform / Robo-Advisor Fees
Trailer Commissions
Ongoing Commission to Distributor / Advisor
Based on AUM of referred clients
Often funded out of 12b-1 / distribution fee
Share Class Differentiation
Class A
Front-end load, lower ongoing distribution fee
Class B
Back-end load, higher distribution fee
Class C / Trail Class
No front load, high ongoing distribution fee
Institutional / Direct Classes
No loads, minimal or no distribution fee
Paid From
Investor (loads directly)
Fund assets (12b-1 / distribution and service fees)
Disclosed As
Front-/Back-end load tables
Distribution & service fees in expense table
Share class-specific expense breakdown
Other Fund-Level Expenses (Non-Management, Non-Distribution)
Custody & Safekeeping
Custodian Bank Fees
Settlement & Corporate Actions Processing
Transfer Agency / Registrar
Investor Recordkeeping
Transaction Processing
Audit & Legal Fees
External Audit
Legal Counsel
Board / Trustee Fees
Independent Directors / Trustees Compensation
Taxes, Levies & Regulatory Fees
Registration Fees (e.g., SEC, SEBI, local regulators)
Stock Exchange Listing Fees (if applicable)
Trading Costs (Not in Expense Ratio for Many Jurisdictions)
Brokerage Commissions
Bid-Ask Spreads
Market Impact Costs
Investor-Level Cost View
Ongoing Annual Costs
Management Company Fees
Distribution / 12b-1 / Service Fees
Administrative, Custody, Transfer Agent Fees
Expressed as Total Expense Ratio (TER) / Ongoing Charge
One-Time / Transactional Costs
Front-End Loads (Subscriptions)
Back-End Loads (Redemptions)
Switching / Conversion Fees (between share classes)
Implicit Costs
Portfolio Turnover (trading costs, market impact)
Cash Drag (uninvested cash holdings)
Net Effect
Gross Portfolio Return
minus Management Company Fees
minus Distributor / Distribution Fees
minus Other Expenses
= Net Investor Return