What is the difference between TER and OCF?

The TER and OCF are very similar in that they both include the AMC plus any additional, on-going, variable costs. The only difference being that the TER does not cover any performance fees or one-off charges. For this reason, the OCF gives the most accurate measure of what it actually costs to invest in a fund.

What is OCF TER?

Fund managers publish their ongoing charges figure (OCF) – previously known as the total expense ratio (TER) – to give an indication of the cost of investing in their funds. So keeping your costs as low as possible is a good idea.

Why is TER important?

The TER you incur on a mutual fund investment indicates the amount you would need to pay to manage your portfolio. Since the TER is a percentage of the total fund assets, it could impact your individual returns as an investor.

What does OCF mean in fund management?

Ongoing charges figure
Ongoing charges figure (OCF) definition Investment funds charge two types of fees.

Is OCF annual?

The ongoing charges figure (OCF) is the charge you’ll pay over a year for as long as you hold your investment.

How is TER deducted?

The total expense ratio or TER is the percentage of the invested sum that is deducted for annual charges (excluding commissions) by investment funds. The investor does not get any returns on the deducted TER but does on the remaining amount. TER is expressed as a percentage of the fund’s daily NAV.

Are transaction costs included in OCF?

Transaction costs of buying and selling portfolio holdings are not included in the OCF. Total dealing costs can vary enormously from fund to fund, depending on how often the fund manager chops and changes the portfolio.

What is a TER fee?

The total expense ratio (TER) is a measure of the total costs associated with managing and operating an investment fund, such as a mutual fund. These costs consist primarily of management fees and additional expenses, such as trading fees, legal fees, auditor fees, and other operational expenses.

How do you find TER?

How is TER Calculated? The calculation used for determining TER is the following: Total expense ratio = (Total costs of the scheme during the period / Total Fund Assets)*100. TER is typically expressed as an annualized percentage of the assets of the fund.