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I'm looking at an investment fund disclosure document, and it's quoting expense ratios:

  • as a % of the fund's value
  • after waivers or absorptions

what does the second phrase mean in general, and/or specifically in this case?

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The fund may waive or absorb certain fees which will make the fund's expenses a little lower. This could possibly make the fund more expensive in the future if the fund does not waive or absorb those expenses in the future, but I wouldn't worry about it.

I would take the expense ratio at face value, and if it changes in the future, reevaluate your decision to invest in it.

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  • mind providing more details - eg, what does it mean for a fund to absorb a fee? what kinds of fees do funds normally waive or absorb, and why? when are they likely to change? Sep 10, 2014 at 14:39
  • I don't think the particular fees are important, rather the target expense ratio is. If they want the expense ratio to be lower, they will waive/absorb enough of the fees to reach that ratio. Sep 10, 2014 at 16:02

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