AMC vs TER – Difference and Comparison

What is AMC?

AMC is a phrase that refers to investing and stockholding mutual funds. The acronym AMC stands for Annual Management Charge. The AMC is the fee for maintaining the lender’s assets and stockholdings. Every month, a sum of money is contributed to the individual’s financing, and it is later included in the Total Expense Ration at the conclusion of the year (TER).

The AMC is a mandatory charge that must be paid. It is paid to the institution and also the individual who orchestrated the scam as the funds’ broker. In addition, AMC is a crucial component of TER.

It’s crucial to keep track of every element of the investor’s investment. As a result, AMC has a specified fixed fee. As an AMC, there are no extra costs that may be deducted or added, and it has a set rate. AMC is commonly described to as an investment obligation, and as such, it is recorded in the books. Because it is among the most crucial parts of the funds, it is essential to include or understand AMC.

Despite the fact that AMC is one of the tiniest components of an investment. But, at the same time, it is a mandatory cost that must be paid. A particular formula can also be used to compute one’s AMC fee. The AMC is easily computed by multiplying the percent by the total assets/value.

What is TER?

TER refers to the total ratio that is gathered and then computed as the overall cost expense of investment and stockholding in the funds. TER is an acronym of the phrases Total Expense Ratio and Total Expense Ratio, respectively.

The TER is the annual calculation of an investor’s investments. Investments and stockholdings comprise a variety of fee charges, so at the conclusion of each year, all of the different types of expenditures are summed together, and the Total Expense Ratio (TER) is computed. Administrative expenses, audit fees, legal fees, and other fees are all included in the TER.

The yearly cost of TER is a ratio that is levied to investors. There is no set pricing for TER. It is computed by adding different charges to the investor’s investment, and as a result, it varies over time depending on the investment. TER is a crucial component of every investment. Without calculating the TER, it is impossible to obtain a good picture of the profitability.

TER is never included in any type of record, such as bank statements or receipts. Because it is not a liability of an investment, it is not included in statements or other sorts of records. It’s only a measurement to get a good picture of all the costs that are collected during the year. TER is easily determined by dividing a year’s total expenditure by its total assets.

Difference Between AMC and TER

  1. AMC refers to the fees charged to investors for managing their assets and stock holdings. TER, on either hand, is the ratio that is used to compute total costing expense.
  2. The acronym AMC stands for Annual Management Charge. The acronym TER, on either hand, stands for Total Expense Ratio.
  3. The AMC is a charge or fee that is paid to manage the TER and other costs. TER, on either hand, is the overall ratio determined from all of the annual charges combined.
  4. Although AMC is invested monthly, it is computed yearly. TER, on either hand, refers to the charges that are determined annually after all costs have been accounted for.
  5. The institution or the persons that manage the investments charge the AMC. TER, on either hand, is a cost that is imposed on investors on a yearly basis.
  6. AMC is subject to a set fee. The TER ratio, on either hand, is determined by the overall costs. As a result, it fluctuates with time the passage of time.
  7. AMC is sometimes described to as an investment obligation, and as such, it is documented in the books. TER, on either hand, is never included in any type of record, such as statements or receipts.

Comparison Between AMC and TER

Parameters of ComparisonAMCTER
DefinitionAMC refers to the fees charged to investors for managing their assets and stock holdings.The TER is the ratio that is used to compute total costing expenditure.
AbbreviationThe acronym AMC stands for Annual Management Charge.The acronym TER stands for Total Expense Ratio.
Charge TypeThe AMC is a charge or fee that is paid to manage the TER and other costs.TER stands for Total Annual Ratio, which is determined using all of the yearly charges as a whole.
Duration of Fee ChargesAlthough AMC is invested monthly, it is computed yearly.TER refers to the charges that are determined annually after all costs have been accounted for.
Reason for the ChargesThe company or the persons that manage the investments charge the AMC.The yearly cost of TER is a ratio that is levied to investors.
Fund ChargeAMC is subject to a set fee.The TER ratio is determined by the total costs. As a result, it fluctuates with the flow of time.

References

  1. https://books.google.com/bookshl=en&lr=&id=EnkPOg1pzJgC&oi=fnd&pg=PA1&dq=Annual+Management+Charge&ots=AInjRxzTYC&sig=b7xPiSNwHQNaiPSgXStGjzBS9p0