The MER (Management Expense Ratio) on a mutual fund includes all of the costs that the fund company incurs. When you walk into your bank think about the cost of maintaining that office space plus all of the staff who work there and all of the other components that make up the operation plus include some kind of profit margin. It is the same thing at a mutual fund company. If you want low MER then buy ETFs or buy individual stocks and don't gripe about the $10 commission on your trade.