Gross Expense Ratio - GER

AAA

DEFINITION of 'Gross Expense Ratio - GER'

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Operating Expense Ratio - OER

    A measure of what it costs to operate a piece of property compared ...
  2. Gross Income

    1. An individual's total personal income before taking taxes ...
  3. Operating Expense

    A category of expenditure that a business incurs as a result ...
  4. Operating Income

    The amount of profit realized from a business's operations after ...
  5. Asset

    1. A resource with economic value that an individual, corporation ...
  6. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected ...
RELATED FAQS
  1. Can an investor buy leveraged ETFs that track the automotive sector?

    As of 2015, no leveraged exchange-traded funds, or ETFs, track the automotive sector. However, a non-leveraged ETF tracks ... Read Full Answer >>
  2. Are so-called self-offering and self-management covered by "Financial Instruments ...

    As the Financial Services Agency (FSA) explains, self-offering of interests in collective investment schemes falls under ... Read Full Answer >>
  3. How is portfolio variance reduced in Modern Portfolio Theory?

    According to modern portfolio theory, or MPT, portfolio variance can be reduced by diversifying a portfolio through the inclusion ... Read Full Answer >>
  4. What are some examples of smart beta ETFs that use passive and active management?

    There are a number of smart beta exchange-traded funds (ETFs) that use passive and active management, including the WisdomTree ... Read Full Answer >>
  5. What happens when I want to sell my A-shares of a mutual fund?

    Typically, commissions or other sales charges may apply when a mutual fund is sold. This is an important factor in deciding ... Read Full Answer >>
  6. What are the advantages of portfolio planning with the efficient frontier?

    The advantages of portfolio planning with the efficient frontier are based in Harry Markowitz's modern portfolio theory (MPT), ... Read Full Answer >>
Related Articles
  1. Mutual Funds & ETFs

    Why Expense Ratios Are Important To Investors

    Expense ratios aren't just numbers in a column. They make a palpable impact on your bottom line. Find out how.
  2. Mutual Funds & ETFs

    A Guide To Investor Fees

    Fees are one of the most important determinants of investment performance and something that every investor should know.
  3. Mutual Funds & ETFs

    Stop Paying High Mutual Fund Fees

    Discover how investment strategies and expense ratios impact your mutual fund's returns.
  4. Mutual Funds & ETFs

    Lower Your Fees With Mutual Fund Breakpoints

    The lower the sales charge you pay, the greater your returns. Find out how to cash in.
  5. Mutual Funds & ETFs

    The Lowdown On No-Load Mutual Funds

    These funds let you cut out the middleman - and the fees.
  6. Fundamental Analysis

    Understanding Modern Portfolio Theory

    Modern portfolio theory describes ways of diversifying assets in a portfolio in order to maximize the expected return given the owner’s risk tolerance.
  7. Investing Basics

    Explaining Idiosyncratic Risk

    Idiosyncratic risk is the risk inherent in a particular investment due to the unique characteristics of that investment.
  8. Professionals

    Worried About Stocks? Try on Convertibles

    Convertibles are a good hedge against equity market risk (if you're o.k. with losing a bit of upside potential).
  9. Stock Analysis

    Playing Rising Rates with Ultra-Short Term Bonds

    With rising rates likely, investors may want to consider adding a dose of ultra-short bonds to their portfolios. Here are some ETFs to consider.
  10. Investing

    Prospering In The Next Bear Market: Here's How

    Prepare to survive, and even prosper, in the impending bear market, by considering and putting into action the following four strategies.

You May Also Like

Hot Definitions
  1. Multicurrency Note Facility

    A credit facility that finances short- to medium-term Euro notes. Multicurrency note facilities are denominated in many currencies. ...
  2. National Currency

    The currency or legal tender issued by a nation's central bank or monetary authority. The national currency of a nation is ...
  3. Treasury Yield

    The return on investment, expressed as a percentage, on the debt obligations of the U.S. government. Treasuries are considered ...
  4. Bund

    A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury ...
  5. European Central Bank - ECB

    The central bank responsible for the monetary system of the European Union (EU) and the euro currency. The bank was formed ...
  6. Quantitative Easing

    An unconventional monetary policy in which a central bank purchases private sector financial assets in order to lower interest ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!