The system can process daily fund expenses across a group of entities. Within the expense process, entities are grouped together, creating an expense group, and daily expenses are calculated based on the combined total net assets for all entities that are members of the group. The system calculates the expense based on the combined value of all the total net assets for each fund in the group. The calculated daily expense is allocated proportionately to the entities of the group based on the percentage of an entity's total net assets relative to the group of entities' total net assets. The NAV component used to contribute to the total assets of the expense group is also the NAV component used to allocate the expenses down to the entities.
...
For example, if a group fixed expense is $1,000 a day the system allocates it based on the following formula.
Expense Group 1/ Entities | NAV Component | Net Assets | % of Total | $1,000 Fixed Expense |
|---|---|---|---|---|
Fund 1 | Prior Day Net Assets NAV | $1,000,000.00 | 50.0% | 500 |
Fund 2 | Prior Day Net Assets NAV | $500,000.00 | 25.0% | 250 |
Fund 3 | Average Net Assets AVENAV | $500,000.00 | 25.0% | 250 |
A variable expense calculates an expense using the system's variable expense tier structure and applies that to the group level net assets. It then distributes the accrued amount down to each entity within a group based on the fund's % of net assets as shown in the fixed expense example.
...