Before Reimbursement Expense Ratio


DEFINITION of 'Before Reimbursement Expense Ratio'

The percentage of a fund's average net assets that is used to cover the annual operating expenses of managing a mutual fund before reimbursements are made to the fund by managers.

Also known as the "gross expense ratio".

BREAKING DOWN 'Before Reimbursement Expense Ratio'

A mutual fund's operating expenses include management fees, transaction costs and other business costs. Some of these expenses may be reimbursed by management. Reimbursed fees often include indirect fees such as transaction costs from dealing with other mutual funds, transaction costs associated with exchange traded funds, or the dividends paid out from a short position on an asset.

Reimbursements also occur when a fund's expense ratio is limited. In capped funds, an expense limit is created to place a ceiling on the charges to the fund's shareholders. The limit is often expressed as a percentage and is a highlighted in the fund's prospectus.

  1. Capped Fund

    A mutual fund that has a limited amount of operating expenses ...
  2. Expense Ratio

    A measure of what it costs an investment company to operate a ...
  3. Prospectus

    A formal legal document, which is required by and filed with ...
  4. Portfolio Manager

    The person or persons responsible for investing a mutual, exchange-traded ...
  5. Expense

    1. The economic costs that a business incurs through its operations ...
  6. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected ...
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