This is a charge for a special type of investment program called a wrap account. Wrap accounts typically offer a group of services to investors, such as management, advisory, and brokerage services, for a regularly assessed fee-normally one to three percent of total assets per year.
In accounting for wrap fees, if investors pay the fees out of their own pockets rather than by selling shares, portfolio market values are not affected by the inclusion of wrap fees. There is one exceptionif a wrap fee occurs on the portfolio end date, it is subtracted from the Final Market Value in the Investment Summary. In this case, it is not added to the Net Dollars Invested. The rationale for this special treatment of wrap fees on the portfolio end date is that when looking at final values, investors want to know the net proceeds or value of their portfolio.
Note: Total returns do reflect the additional cost incurred by the investor in paying the wrap fee. Also, because wrap fees are treated as additional investments, they are added to the investment value in the graph.