Gross Expense Ratio (GER)

The gross expense ratio (GER) is a measure of the total cost of owning an investment fund. It includes all of the fund's operating expenses, such as management fees, marketing expenses, and administrative expenses. The GER is expressed as a percentage of the fund's assets under management (AUM).

For example, if a fund has a GER of 1%, then for every $100 invested in the fund, $1 will be used to cover the fund's operating expenses. The GER is an important factor to consider when choosing an investment fund, as it can have a significant impact on your returns.

There are two main types of expense ratios: the front-end load and the back-end load. The front-end load is a fee that is charged when you invest in a fund. The back-end load is a fee that is charged when you sell your shares of a fund.

The GER does not include any sales charges, so it is a more accurate measure of the cost of owning a fund than the front-end or back-end load. However, the GER does not take into account the impact of taxes on your investment returns.

The net expense ratio (NER) is a measure of the total cost of owning an investment fund after taking into account the impact of taxes. The NER is calculated by subtracting the fund's estimated tax liability from its GER.

The NER is a more accurate measure of the cost of owning a fund than the GER, but it is also more difficult to calculate. For this reason, the GER is often used as a proxy for the NER.

When comparing investment funds, it is important to consider both the GER and the NER. The GER will give you an idea of the total cost of owning the fund, while the NER will give you an idea of the after-tax cost of owning the fund.

It is also important to remember that the GER and the NER are only estimates. The actual cost of owning a fund may be higher or lower than the estimated cost.