Management Fee is the charge levied by a Mutual Fund for covering its expenses related to managing the investments of a Mutual Fund. Mutual Fund companies have to analyse, research and then select the appropriate investment to be included in the Mutual Fund portfolio. This is done by qualified, experienced and professional money managers or ‘Fund Managers’. Along with the fund management charges, there are other fund operating costs, which are covered under management fees. The management fee is part of the overall Expense Ratio or Total Expense Ratio (TER) that a fund House can charge. The bigger the size of a Mutual Fund, the lower is its Management Fees.
