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What is Effective Annual Cost?

The Effective Annual Cost measure (EAC) is a standardized disclosure methodology that can be used by consumers and financial advisers to compare charges and their impact on investment returns on most retail investment products so that consumers are placed in a position to make better informed decisions. In our instance this is in respect of the costs of investing in a Collective Investment Scheme portfolio (unit trust fund).

The Effective Annual Cost (EAC) is expressed as an annualised percentage. The EAC is made up of four components, which are added together, as shown in the table below. The effect of some of the charges may vary, depending on your investment period. The EAC calculation assumes that an investor terminates his or her investment in the selected fund at the end of the relevant periods shown in the table.

    Impact of charges 1 Year 3 Years 5 Years 10 years
    Investment management 1 X.X% X.X% X.X% X.X%
    Advice 2 X.X% X.X% X.X% X.X%
    Administration 3 0.0% 0.0% 0.0% 0.0%
    Other 4 0.0% 0.0% 0.0% 0.0%
    Effective Annual Cost X.X% X.X% X.X% X.X%

1. The Investment Management charge is the total of the weighted Total Expense Ratio and the transactional costs of the underlying financial products. It is calculated on a quarterly basis over a historical 3 year rolling period. The investment management charge may include a referral fee.

2. Where no adviser has been engaged, no advice fees are included in the calculation.

3&4. There are currently no additional administration or other charges applicable on this investment. All investment charges are included under Investment Management Charges.

The EAC is a measure of the charges that an investor will likely incur in purchasing and holding a unit trust fund, and does not attempt to measure the features of the fund. The features and full details are described on the Minimum Disclosure Document, also available on this website.

When to use the EAC calculator?

Before investing or considering making a change to your existing investment, you are required to enter your planned investment details into the EAC calculator to enable you to acquaint yourself with the charges that will apply to your planned investment to enable you to make an informed decision.

PSG Asset Management will at all times endeavour to ensure that all values used in calculations are accurate and comprehensive, and that its calculations are accurate. Where any value is not available, we will use a reasonable and best estimate of the value and shall state that it has done so in the free text notes directly under the EAC disclosure table.

Where to find the EAC calculators?

To access the Effective Annual Cost Calculator in respect of the rand-denominated funds, please click here.

To access the Effective Annual Cost Calculator in respect of the foreign currency-denominated funds, please click here.

If you have any queries, please email us at and we will contact you to assist.

Copyright © PSG Konsult Ltd (1998-2021), All Rights Reserved. FAIS affiliates of the PSG Konsult Group are authorised financial services providers.