What is Ongoing Charges Figure (OCF)?

Full Definition

The Ongoing Charges Figure (OCF) is a standardised measure, expressed as a percentage of the amount invested, showing the annual cost of holding a fund such as a unit trust, OEIC, investment trust or exchange-traded fund. It includes the fund manager's annual management charge together with other routine running costs, such as administration, regulatory and audit fees, giving investors a single, comparable figure for the ongoing cost of a fund that is deducted automatically from its assets, rather than billed separately. The OCF replaced the older Total Expense Ratio (TER) as the industry-standard disclosure figure under EU-derived fund regulations, and it is what most UK fund factsheets now quote. The OCF does not capture every cost an investor bears: it excludes the fund's own dealing costs (the price impact and broker commission incurred when the fund manager buys and sells the underlying investments within the portfolio), any performance fee charged only when the fund beats a target, and, critically, the separate platform fee charged by the fund supermarket or investment platform on which the fund is held. A fund with a low OCF is not automatically the cheapest option overall once platform fees, dealing costs and any advice charges are added, so comparing the OCF alongside these other costs -- rather than in isolation -- gives a much more accurate picture of the total cost of investing.

See Also