CompareTaux

Guides · Investments and savings

Fees you never see are deducted all the same.

The layers of fees in an investment, where to find them in your documents, and the effect of compounding them over a long period.

The CompareTaux teamReading: 6 min

The management expense ratio

Expressed as an annual percentage of assets, it bundles management fees, operating expenses, and applicable taxes. It is deducted inside the fund: the return you see is already net of it, which is what makes it invisible.

Sales charges

Some funds carry a charge on purchase, or declining redemption charges if you sell before a number of years. These structures have become rare but still exist in accounts opened long ago.

Separately billed advice fees

In some accounts, advisory compensation is billed apart from the fund, sometimes as a percentage of assets under management. The structure is more transparent, but you must then add both layers to know the total cost.

Wrapper fees

An account can carry administration fees, transaction fees, or fees specific to an insurance contract where it is a segregated fund with guarantees. Those last ones pay for the guarantee, not for management.

The effect of compounding

An apparently minor annual fee difference, applied to capital over twenty or thirty years, represents a significant share of compounded return. It is the only parameter of return you control with certainty.

Where to find them

The fund facts document states the management expense ratio and the sales charges. Your annual statement provides the report on charges and compensation, along with your personalized rate of return. Both documents can be requested and should be read.

No rate, price, or recommendation on this page. Amounts and limits change: verify them with official sources before deciding.