Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Just read the new summary prospectus. They are no longer waiving any expenses and the ER for the Institutional shares is 2.32% with the investors [email protected]%. I think this is too much, particularly, since they haven't done well very recently. Anyone have thoughts as to whether this holding is worth keeping or an alternative fund or ETF to replace it?
The waiver is still in place, until at least February 28, 2016. Expenses, excluding "interest, taxes, dividend expense, borrowing costs, acquired fund fees and expenses, interest expense related to short sales, and extraordinary expenses" are limited to 1.35% and 1.60% for the institutional and investor class shares, respectively.
Take a look at the expense breakdown. "Dividend and interest expense on short sales" is 1.00%; "acquired fund fees" is 0.07%. Subtract their sum, 1.07%, from the ERs you quoted and you get ERs of 1.25% and 1.50% respectively - below the cap imposed by the fee waiver. So while the waiver is in place, the amount of fees waived is 0.
Actually, it's a bit worse than that. Like many fee waivers, this one has a claw back provision. If the actual ER comes out to be less than the waiver cap, then the fund will raise the ER up to the cap level, in order to recapture the fees that it waived over the past three years.
So here, because the actual ERs are 10 basis points below the promised caps (e.g. 1.25% is 0.10% below the cap of 1.35%), the fund will tack on an extra 10 basis points to get back the fees it waived in the past. It can only do this for three years, and only until it reclaims all the fees it waived. Still ...
MSF, thanks for the explanation. I always think that tactical funds are a senswible way to invest figuring they will do a a bgetter job of asset allocation then I can, but I'm usually disappointed with the results. this last year has been difficult, but perhaps I need a longer horizon.
Comments
Take a look at the expense breakdown. "Dividend and interest expense on short sales" is 1.00%; "acquired fund fees" is 0.07%. Subtract their sum, 1.07%, from the ERs you quoted and you get ERs of 1.25% and 1.50% respectively - below the cap imposed by the fee waiver. So while the waiver is in place, the amount of fees waived is 0.
Actually, it's a bit worse than that. Like many fee waivers, this one has a claw back provision. If the actual ER comes out to be less than the waiver cap, then the fund will raise the ER up to the cap level, in order to recapture the fees that it waived over the past three years.
So here, because the actual ERs are 10 basis points below the promised caps (e.g. 1.25% is 0.10% below the cap of 1.35%), the fund will tack on an extra 10 basis points to get back the fees it waived in the past. It can only do this for three years, and only until it reclaims all the fees it waived. Still ...