Home | Profile | Find a Financial Adviser | Client Services | Calculators | Links | Contacts | Important Information
Indirect Cost Ratio and Other Management Costs Indirect Cost Ratio (ICR) This is the ratio of indirect costs to the total investment in the fund. The ratio is calculated periodically by the investment manager and is expressed as a percentage. It is used to calculate Other Management Costs. The Indirect Cost Ratio for an investment fund is the same for all people who have chosen that investment. Other Management Costs (OMC) Other Management Costs show, as an approximate dollar value, your portion of the indirect costs of the investment fund. These costs are deducted before the calculation of unit prices and/or crediting rates. These are not deducted directly from your account. Other Management Costs is only shown in the ‘Total fees you paid’ section of your statement. How is Other Management Costs calculated? Other Management Costs is determined by multiplying your average account balance for the reporting period by the Indirect Cost Ratio. Your average account balance . . XIndirect Cost Ratio (ICR). . =Other Management Costs (OMC) Example 1: Other Management Costs calculation Your average account balanceIndirect Cost Ratio (ICR)Other Management Costs (OMC) Example investment $5,000X2%=$100 What if you have more than one investment fund? Individual Other Management Costs calculations will be performed for each of your investment funds during the reporting period. These amounts are then added together and presented as a single total Other Management Costs dollar amount on your statement. Example 2: Other Management Costs calculation Your average account balanceIndirect Cost Ratio (ICR)Other Management Costs (OMC) Example investment A$5,000X2%=$100 . Example Investment B $7,000X 1.5%= $105 Total Other Management Costs (shown on statement):$205 Why is Other Management Costs approximate? Other Management Costs is described as approximate because it is based on two variables. These are your average account balance (which changes daily) and the Indirect Cost Ratio (which is calculated periodically by the fund manager).
Indirect Cost Ratio (ICR) This is the ratio of indirect costs to the total investment in the fund. The ratio is calculated periodically by the investment manager and is expressed as a percentage. It is used to calculate Other Management Costs. The Indirect Cost Ratio for an investment fund is the same for all people who have chosen that investment. Other Management Costs (OMC) Other Management Costs show, as an approximate dollar value, your portion of the indirect costs of the investment fund. These costs are deducted before the calculation of unit prices and/or crediting rates. These are not deducted directly from your account. Other Management Costs is only shown in the ‘Total fees you paid’ section of your statement. How is Other Management Costs calculated? Other Management Costs is determined by multiplying your average account balance for the reporting period by the Indirect Cost Ratio. Your average account balance . . XIndirect Cost Ratio (ICR). . =Other Management Costs (OMC) Example 1: Other Management Costs calculation Your average account balanceIndirect Cost Ratio (ICR)Other Management Costs (OMC) Example investment $5,000X2%=$100 What if you have more than one investment fund? Individual Other Management Costs calculations will be performed for each of your investment funds during the reporting period. These amounts are then added together and presented as a single total Other Management Costs dollar amount on your statement. Example 2: Other Management Costs calculation Your average account balanceIndirect Cost Ratio (ICR)Other Management Costs (OMC) Example investment A$5,000X2%=$100 . Example Investment B $7,000X 1.5%= $105 Total Other Management Costs (shown on statement):$205 Why is Other Management Costs approximate? Other Management Costs is described as approximate because it is based on two variables. These are your average account balance (which changes daily) and the Indirect Cost Ratio (which is calculated periodically by the fund manager).
Other Management Costs (OMC) Other Management Costs show, as an approximate dollar value, your portion of the indirect costs of the investment fund. These costs are deducted before the calculation of unit prices and/or crediting rates. These are not deducted directly from your account. Other Management Costs is only shown in the ‘Total fees you paid’ section of your statement. How is Other Management Costs calculated? Other Management Costs is determined by multiplying your average account balance for the reporting period by the Indirect Cost Ratio.
