Apart from the management fee, there are certain non-management expenses which most funds must pay.  Some of the more significant in terms of amount non-management expenses are: transfer agent expenses this is usually the person you get on the other end of the phone line when you want to purchase/sell shares of a fund, custodian expense the fund’s assets are kept in custody by a bank which charges a custody fee, legal/audit expense, fund accounting expense, registration expense the SEC charges a registration fee when funds file registration statements with it, board of directors/trustees expense the disinterested members of the board who oversee the fund are usually paid a fee for their time spent at meetings, and printing and postage expense (incurred when printing and delivering shareholder reports.

Included in this category are expenses not included in the categories of management fees or distribution and/or service 12b-1fees.  Examples include: shareholder service expenses that are not included in the distribution and/or service 12b-1 fees category; custodial expenses; legal expenses; accounting expenses; transfer agent expenses; and other administrative expenses.

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