#10 Expense Ratio
'EXPENSE RATIO: The ratio of total Pooled Fund expenses to average net assets.'
This term is defined in the GIPS 2020 Exposure Draft as “The ratio of total POOLED FUND expenses to average net assets. The EXPENSE RATIO SHOULD NOT reflect TRANSACTION COSTS.”
Key Points about This Term
- This term is new in the Global Investment Performance Standards (GIPS) vocabulary.
- Its use has come about because of the inclusion of Pooled Funds in the GIPS2020.
- Fun Fact – It appears six (6) times in the Exposure Draft, excluding its appearance in the definitions section.
- Possible Evolution under new Standards – The term is here to stay as part of Pooled Funds terminologies.