AMC stands for what in the context of a CIS?

• A. Asset Management Contribution
• B. Administrative Management Cost
• C. Annual Monitoring Charge
• D. Annual Management Charge

Answer: (D)

In this context, the annual fee paid to the fund manager for running the fund is called the Annual Management Charge. It represents the ongoing cost of managing the investment and administering the fund, and is expressed as a percentage of assets under management. Each year this percentage is deducted from the fund’s assets, reducing returns to investors. This charge is a standard part of a fund’s ongoing costs and is usually included in the fund’s ongoing charges figure. The other phrases aren’t the conventional term used for this annual fee in CIS practice.