Non-Capped Fund

Definition of 'Non-Capped Fund'


A mutual fund with no limit on the annual operating expenses charged to shareholders. In a non-capped fund, the charges will always cover the cost of doing business, as no ceiling has been placed on the fees.

Investopedia explains 'Non-Capped Fund'


Investors in non-capped funds do not have the luxury of knowing the maximum amount of fees chargeable by the fund. Since the expenses have no limits, investors are exposed to the risk of high fees, which would diminish their investment returns. The operating expenses of a mutual fund are expressed as a percentage of the total annual fees divided by the fund's average assets. Non-capped fund expenses are based on the before-reimbursement expense ratio, which includes both direct and indirect fees.


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