Before Reimbursement Expense Ratio

AAA

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".

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Expense

    1. The economic costs that a business incurs through its operations ...
  2. Expense Ratio

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

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

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

    A formal legal document, which is required by and filed with ...
  6. Capped Fund

    A mutual fund that has a limited amount of operating expenses ...
Related Articles
  1. When To Sell A Mutual Fund
    Mutual Funds & ETFs

    When To Sell A Mutual Fund

  2. How To Pick A Good Mutual Fund
    Mutual Funds & ETFs

    How To Pick A Good Mutual Fund

  3. Will A New Fund Manager Cost You?
    Mutual Funds & ETFs

    Will A New Fund Manager Cost You?

  4. The Advantages Of Mutual Funds
    Mutual Funds & ETFs

    The Advantages Of Mutual Funds

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center