A charge levied by an investment manager for managing an investment fund. The management fee is intended to compensate the managers for their time and expertise. It can also include other items such as investor relations expenses and the administration costs of the fund.

Investopedia Says:
The management fee is the cost of having your assets professionally managed. The fee pays other people to select which securities your money (along with that of the other investors in the fund) is invested into, to do all the paperwork needed and to provide information about the fund's holdings and performance.

Management fee structures vary from fund to fund, but they are typically based on a percentage of assets under management. For example, a mutual fund's management fee could be stated as 0.5% of assets under management.

Related Links:
Learn about the basics - and the pitfalls - of investing in mutual funds. Mutual Fund Basics Tutorial
The way a professional is compensated can affect quality of service. Learn more here. Paying Your Investment Advisor - Fees Or Commissions?

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