Short for Management Expense Ratio — the annual fee charged by an investment fund, expressed as a percentage of your invested assets, automatically deducted from the fund's returns before you see them.
You never receive a bill for it — it's quietly subtracted from the fund's performance before your account balance updates. A 0.09% MER means roughly $9/year deducted for every $10,000 invested; a 1% MER means roughly $100/year for the same amount. It sounds small, but fees compound against your returns the same way growth compounds for you, so the gap between a 0.1% fund and a 1% fund adds up to a lot of money over 20-30 years.
$100,000 invested for 30 years at 7% growth becomes about $761,000 at a 0.1% MER — but only about $597,000 at a 1.1% MER. That one-percentage-point fee difference quietly costs over $160,000 across the three decades.
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