You can set up master funds to use a special waiver processing method of Waterfall Waiver Daily or Waterfall Waiver FYTD for expenses.
This type of special waiver requires the completion of all expense processing prior to calculating the special waver. However, unlike an assumption fee, waterfall waivers reference user defined expense caps for each share class, as well as NAV Components that can be unique to each share class.
A waterfall waiver employs a user defined hierarchy to target multiple fund level and class level expenses to waive. You can create hierarchy rules for the fund and class level expenses and link them to the entity to allow for the same rules to be shared by many funds. When the total class gross expenses exceeds the class expense cap, the class hierarchy is summoned to virtually waive the total class level expenses in the class hierarchy. If the amount over cap exceeds the total class level expenses for any one of the share classes, the fund hierarchy is summoned and the driving class is determined. A fund level waiver in the amount needed to zero the driving class or the share class furthest from its cap is posted against the fund level expense(s) according to the fund hierarchy. After the fund level waiver(s) is posted and allocated down to all share classes, the class level expenses are actually waived until the cap is met. If a total fund waiver is not needed, the system ignores the total fund waiver process and class level expenses are actually waived. The option to waive up to 100% of the daily gross expense or the fiscal year to date expense balance is provided as an entity election.
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If you set up a master fund to use Waterfall Waiver Daily special waiver processing, you can additionally set up simple waivers for the fund at the variable expense level. However, if you set up a master fund to use Waterfall Waiver FYTD special waiver processing, Eagle recommends that you do not additionally set up simple waivers for the fund at the variable expense level. Because the fund calculates FYTD values for the special waivers, the regular waivers are not necessary. The Waterfall Waiver FYTD method requires a one-to-one relationship between expenses and waiver accounts on the waiver hierarchy to obtain true FYTD balances. If an entity uses any special waiver processing method, Eagle also recommends that you do not create waiver reclass entries for that entity because the special waiver processing calculations do not take those entries into account. |
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