Tag Archive for: Expense ratios

Pooled Fund Net Returns & Expense Ratios

Looking for a little distraction to kick-start the spring?  We are highlighting five top performance Q&A’s focused on pooled fund expenses.

1. Someone said that the expense ratio should be annualized. What is the source for this requirement?

In the Explanation of the Provisions for Section 6, 6.A.5 it states that “Pooled fund expense ratios that are calculated for periods of less than one year must be annualized.” The expense ratio may also be shown in an exhibit if the exhibit is provided along with the GIPS Report.  Important consideration: During the first year of a fund’s life, expenses are often capped.  An annualized partial-year expense ratio would not ever be larger than the fund’s stated maximum annual expense ratio.

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