What is the 'Gross Expense Ratio - GER'

The gross expense ratio (GER) is the total percentage of a mutual fund's assets that are devoted to running the fund. The gross expense ratio (GER) is exclusive of any waiver of fees or expense reimbursements. Likewise, it does not include "outside" expenses, like brokerage costs for trading the portfolio. These and other costs are reported in a Statement of Additional Information (SAI) that is sent to the SEC.

BREAKING DOWN 'Gross Expense Ratio - GER'

The GER is important because it more directly correlates to the fund's performance than the plain expense ratio does. For example, if a fund has an expense ratio of 2% and a GER of 3%, it is readily apparent that 1% of the fund's assets were used to waive fees, reimburse expenses or provide other rebates not included in the expense ratio. This is important because such rebates and reimbursements may or may not continue in the future. Prudent investors will want to examine both figures and compare them to like funds before investing.

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RELATED FAQS
  1. How do waivers, reimbursements and recoupments affect a fund's expense ratio?

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    Discover what is considered an exceptionally high or low expense ratio for a mutual fund or ETF, and learn why this figure ... Read Answer >>
  3. Can mutual fund expense ratios be negative?

    Learn what an expense ratio is, and whether mutual funds, closed-end funds and exchange-traded funds can have negative expense ... Read Answer >>
  4. Why is a mutual fund's expense ratio important to investors?

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  5. Do mutual fund trading costs hurt your bottom line?

    Find out how a mutual fund's expense ratio could be eating into your bottom line, what costs are included and an example ... Read Answer >>
  6. What kinds of expenses are included in the expense ratio?

    Understand the variety of costs and charges that are included in the total expense ratio assessed to investors using mutual ... Read Answer >>
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