Capped Fund
A mutual fund that has a limited amount of operating expenses that can be charged annually to shareholders. The limit is expressed as a ratio of total operating expenses divided by the fund's average net assets. The fund's investment advisor will disclose the expense limit in the prospectus. Investopedia Says:
Limiting the expense ratio of a mutual fund provides investors with a fee ceiling. While the cap provides investors with the highest fee to expect, the cap can also be removed by the fund manager. The fund's prospectus will often state when the expense limit will expire or change. The expense limit can be measured with either the before or the after reimbursement expense ratios. Related Terms:
After Reimbursement Expense Ratio
Back-End Load
Before Reimbursement Expense Ratio
Ceiling
Commission
Expense
Expense Limit
Front-End Load
Mutual Fund
Prospectus |