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Please explain Gross Expense Ratio vs Net Expense Ratio
Posted on 11/16/18 at 8:43 pm
Posted on 11/16/18 at 8:43 pm
I am looking at our investment partner (Valic) for my company and making sure that i'm offering the best plans for them. I was reading through one of our fund portfolio's (Dividend Value) and I came across the GER and NER and not sure how to value these. The GER is at 0.83% and the NER is 0.82% with an annual operating expense of $8.20 per $1,000. I googled the GER and NER and read the investopedia page on it but it just doesn't make sense to me. Anyone explain these and whether or not this is good? My research says that these numbers will typically be less than 1% and i'm at the high side of that, plus the OE of $8.20/$1,000 seems high. That means that we're paying $8 for every thousand of investments that we have with this fund?
LINK
LINK
1
Posted on 11/16/18 at 11:02 pm to CHiPs25
Net simply takes into account the waivers and reimbursements on a fund. Start at gross, take out all the agreements between firms, get net.
It's tough to say whether or not this is a good expense ratio without more information on what your circumstances are that would help determine your options. This could very well be expensive (in a larger or more open platform plan), but I've also seen situations where this may not be that expensive at all (in smaller and more captive plans).
Eta. just looked at your link. This is on a variable annuity platform. I'm not reading this prospectus, but I can promise you this isn't 70 pages explaining how inexpensive this is.
Prospectus
It's tough to say whether or not this is a good expense ratio without more information on what your circumstances are that would help determine your options. This could very well be expensive (in a larger or more open platform plan), but I've also seen situations where this may not be that expensive at all (in smaller and more captive plans).
Eta. just looked at your link. This is on a variable annuity platform. I'm not reading this prospectus, but I can promise you this isn't 70 pages explaining how inexpensive this is.
Prospectus
This post was edited on 11/16/18 at 11:11 pm
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