The cost to launch a mutual fund varies based on whether the fund is created inside a series or standalone trust. Typically, setup and organizational costs range from $45,000 to $100,000 (not including additional platform fees) depending on the complexity and the structure of the fund. At a minimum, annual mutual fund operating expenses (not including sales & marketing expenses) are approximately $175,000 to $200,000. These fees cover fund administration, annual audit, shareholder reporting and support, transfer agent, corporate governance, and compliance.
Through a waiver of their management fee and/or reimbursement by the advisor, the advisor is responsible for all fund expenses until the assets in the fund hit the breakeven amount. Breakeven is achieved when the advisor no longer subsidizes fund expenses beyond a total waiver of the advisory fee.