Understand Waterfall Waivers

You can set up master funds to use a special waiver processing method of Waterfall Waiver Daily or Waterfall Waiver FYTD for expenses. Only single class and multi class funds can use waterfall waivers. 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.

The system requires the completion of all expense processing prior to calculating the waterfall waver. When the total class gross expenses exceeds the class expense cap, the system summons the class hierarchy 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 system summons the fund hierarchy and determines the driving class. 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 system posts the fund level waiver(s) and allocates them 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 available.

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