Management fee vs. management expense ratio (MER)
You may have heard the terms "management fee" and "management expense ratio" (MER) mentioned in association with mutual funds, and be wondering what the difference is.
- management fee: the fee paid to the fund's manager for supervising the administration of the fund.
- management expense ratio (MER): total expenses expressed as an annualized percentage of daily average net assets. MER does not include brokerage fees and commissions, which are also payable by a fund.
Each CIBC Mutual Fund pays its manager, Canadian Imperial Bank of Commerce, a management fee and is also responsible for its own operating expenses.
Special management fee discount for Simplii Financial™ customers
Customers of Simplii Financial services get an automatic management fee discount when they invest in index mutual funds from CIBC Securities Inc.
With this special offer, you'll receive a management fee discount of 10 basis points to give you an opportunity to increase your long-term investment return. The special management fee discount is calculated as follows:
- calculated daily, paid quarterly
- based on closing market value of the index funds within an account for the previous day
- paid to the investor's account through a distribution of additional units of the same mutual funds
- considered income to non-registered account holders and reported on the Statement of Trust Income and T3 tax slips (applicable taxes included)
- if you sell or transfer all units of the fund, any accrued management fee rebate earned but not yet distributed, will be distributed to the fund and included in the total transaction amount
Important information about CIBC Securities Inc. and CIBC Mutual Funds
* CIBC Mutual Funds and the CIBC Index Portfolio Rebalancing Service are offered by CIBC Securities Inc., a wholly-owned subsidiary of CIBC. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments and the use of an asset allocation service such as the CIBC Index Portfolio Rebalancing Service. Read the CIBC Mutual Funds prospectus before investing. To obtain a copy, call 1-888-723-8881Opens your phone app. and select the mutual fund option, or ask to speak to a CIBC Securities Inc. Mutual Fund Representative. For periods greater than one year, the indicated rates of return are the average annual compound total returns as of the date indicated and all returns include changes in unit value and the reinvestment of all distributions and do not take into account sales, redemption, distribution or other optional charges or income taxes payable by any unitholder that would have reduced returns. The performance data for money market funds also shows the current yield and effective yield as of the date indicated and assumes the reinvestment of distributions only and does not take into account sales, redemption, distribution or other optional charges or income taxes payable by any unitholder that would have reduced yields. Neither CIBC Mutual Funds nor the CIBC Index Portfolio Rebalancing Service are covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer, nor are they guaranteed by CIBC. There can be no assurance that funds will be able to maintain their net asset value per security at a constant amount or that the full amount of your investment will be returned to you. The values of many mutual funds, such as Income and Growth Funds, can change frequently. Past performance may not be repeated. The CIBC Index Portfolio Rebalancing Service is an asset allocation service available through CIBC Securities Inc. The portfolio manager is CIBC Global Asset Management Inc. The core asset mixes in each Strategic Asset Manager (SAM) portfolio have been recommended by CIBC Global Asset Management Inc. The management fee rebate for CIBC Index Funds is provided by the Canadian Imperial Bank of Commerce as the manager of the funds.
The difference between the management fee otherwise chargeable and the reduced fee payable will be distributed by the Fund to eligible unitholders (a “Management Fee Distribution”). The amount of the Management Fee Distribution is automatically invested in additional units of the applicable class of units of the Fund. Management Fee Distributions received in non-registered accounts may be taxable. A Management Fee Distribution results in a distribution of additional income, capital gains and capital to an investor. The investor will receive a T3 slip with Management Fee Distribution included in the appropriate boxes. You should discuss Management Fee Distributions with your tax advisor so that you are fully aware of the tax implications for your particular situation.
CIBC Mutual Funds and the CIBC Index Portfolio Rebalancing Service are available across Canada (excluding Quebec). The information contained on this site does not constitute an offer or solicitation to buy or sell any investment fund, security or other product, service or information to any resident of Quebec, the U.S. or the U.K. or to anyone in any jurisdiction in which an offer or solicitation is not authorized or cannot legally be made or to any person to whom it is unlawful to make an offer or solicitation.
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