The first methodology is referred to as the 'Per Share Expense'. It has been part of the retail fund performance module since its inception in 2001. This method uses a daily per share amount of the expense which must be stored on each day's NAV record. The gross return calculation treats the stored expense values just like a distribution. It reinvests the per share expenses and add shares in order to gross up the return.
The second gross return calculation methodology is referred to as the 'Annual Ratio'. As the name implies, it uses a fund's annual expense ratio to calculate gross of expense returns. It does this by using the annual expense ratio to derive an amount that is reinvested in order to gross up the return.
The following section describes the Annual Ratio methodology and its features. It also provides instructions for how to configure the system to use this methodology.
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