The management fee is what the fund manager earns for selecting and managing the fund's investments, computed as an annual percentage of fund assets and deducted directly from its value. It is usually the largest component of a fund's total cost.
The essential point: the fee is tied to asset size, not results. A manager charging 1.75% collects it in winning and losing years alike. Some funds add a performance fee paid only above a set hurdle, disclosed in the fund's terms and conditions.
Fees vary widely by fund type: index and money market funds are usually cheapest because their management is nearly mechanical, while actively managed equity funds charge more. The fair question is not "how much is the fee?" but "what am I getting for it?" — a higher fee without persistently better performance is simply forgone return.
In Tadawul's data for listed funds, the management fee appears separately from the expense ratio; add the two to know your true cost.