Acquired Fund Fees and Expenses - AFFE
Categories: Mutual Funds, Index Funds, Banking, Trusts and Estates
First check out Fund of Funds, which isn't any more fun.
AFFE are simply the operating expenses of the actual funds being managed. That is, when you pay your fund of funds fee, that fee is in addition to the fees you are already paying for the funds themselves to be managed. The AFFE was driven by SEC mandate in 2007, when the complexity of pricing for the hedge fund and private equity communities began to be so difficult to understand that government intervention was required.
So in a typical mutual fund, AFFE fees might run in addition to distribution fees at, say, half a percent, then operating expenses of 1%, and then add another five to ten basis points for AFFE, so that the total fees per year being paid by the customer are some 2%-plus in this expensive, high-fee world.
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mutual funds had to bear enormous communications related expenses in the
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