What does the Ongoing Charges Figure, or OCF, include for UCITS funds?

• A. Only initial charges
• B. Only management fees
• C. Only external advisory fees
• D. All ongoing expenses such as management, depositary, custodian, and adviser

Answer: (D)

The Ongoing Charges Figure shows the total annual costs that are charged to you for keeping the fund running on an ongoing basis. For UCITS funds, this includes all the recurring expenses needed to operate the fund, such as the management fee, fees paid to the depositary and custodian, and adviser or other professional fees, plus other ongoing operating costs. It does not include initial or entry charges or costs from buying and selling assets (transaction costs). So the OCF reflects all the ongoing expenses a fund incurs, making it the best measure of the true annual cost of holding the fund.