The rate of increase for an invested amount of capital. Generally, there are two ways that return is presented – the “simple” rate of return and the “historical” (or compound) rate of return.
Term of the Minute
- Management expense ratio (MER)
The management expense ratio (MER) shows the percentage of the fund’s daily average net assets that was paid in management fees and other expenses during the year. The MER is shown at an annualized rate if the financial year is less than 12 months. The method of calculating the MER of mutual funds was changed by securities regulators on February 1, 2000. Some expenses, such as taxes and interest that were previously excluded, are now included in the calculation.