It comes off the top. That's why many mutual fund unitholders are completely unaware that their fund charges this fee. Make no mistake, we are talking big money here. This is where mutual fund companies make their profits. Moreover, this amount is paid whether the fund performs well or not.
Management fees are non-negotiable.
There is no bargaining. You will then be in a position to make a more knowledgeable decision. It sounds highly mathematical but it is quite simply the total of all other expenses charged to the fund, plus the management fee, expressed as a percentage of the fund's total assets. These incentives increase the MER and decrease returns to unitholders. The draft code recommends that these promotional incentives be prohibited.