GIPS_Fees and Expenses returns, correct, custody, includes

jcole21

1. "Returns must be reduced by the entire bundled fee that includes the direct trading fee... when calculating gross-of-fee returns" So is this requirement applied to both gross-of-fee return and net-of-fee return?

2. Indirect trading trading expenses and custody fees are not reduced when calculating returns? Is that correct?

Thank you

lcai

1 - Yes. Net-of-fee returns are gross-of-fee returns minus asset mgmt fees.
2 - Custody fees are not included. Only actual trading expenses are decucted.

Chuckrox

About (1), Schwerser book 5 P.190 says:" When calculating gross-of-fee return, returns must be reduced by the entire bundled fee that includes direct trading expenses"

So why do we have to deduct bundled fee to come up with Gross-of-fee returns? I think net-of-fee returns would make more sense.

cityboy

Gross-of-fee returns do not include the inv mgmt fees.