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.
Related or Semi-related Video
Finance: What is Acting Against Recommen...2 Views
finance a la shmoop what is acting against recommendations hmm
let's say you head to the emergency room with stomach pains the doctor in charge [Man driving fast with stomach pains]
says yep you've got appendicitis but I'm brutally
tired so I recommend you go home well odds are if the doc himself had [Doctor in pain with stomach pains]
appendicitis he'd get someone to take that puppy out stat acting against
recommendations is kind of like that just in the financial world if your
broker tells you to do something he wouldn't recommend for his own [Man discussing finance with his broker]
investments well he has a duty to tell you that he wouldn't do that same thing
in his own case that usually happens when some bonehead tells a broker, hey I
want to bet my life savings on this new IPO well why would anyone act against
recommendations well in the case of the doc maybe he's so tired that he's a [Doctor holding scalpel and falls to the floor]
dangerous menace in the O.R... In the case of your broker well maybe there's
something about your specific situation that makes acting against recommendation
the way to go well as long as they tell you that it's against recommendations
well, they're legally in the cure just don't ask that broker to perform
your kidney transplant [Broker walks into office]
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