Glossary
Total Expense Ratio (TER)
Total Expense Ratio (TER) denotes the total cost ratio of a financial product, expressed as an annual percentage of assets under management. It includes management fees, operating costs, and other ongoing charges, but not transaction costs or one-off sales charges. A lower TER improves net returns.
At a glance
01
The TER is calculated annually on the basis of average net assets and is charged directly against the product.
02
For AMC structures, the TER typically includes the Management Fee, the structuring fee, and custodian costs.
03
Performance-related fees (Performance Fees) are not part of the TER.
Frequently asked questions
The TER of an AMC covers ongoing costs such as the Management Fee and administration charges. Not included are transaction costs incurred when buying and selling securities within the portfolio, as well as any Performance Fees. These additional costs can significantly affect the total cost burden for the investor.
Part of the topic
AMC & Structuring
