Before Reimbursement Expense Ratio

The value of an investment fund prior to fees paid for administrative purposes.

Mork and Mindy each invest $100, Mork in a zero-fee S&P 500 ETF, and Mindy in an actively managed stock portfolio intended to closely mimic the S&P 500. Mindy pays her friend, Peter, a 5% annual fee for managing her money. After one year, the S&P 500 rises 10% and Mork's investment grows to $110.00. With all of Peter's expertise, he is able to outperform the index by 50 basis points (or 10.5%) for a fund value of $110.50 before reimbursement expense ratio. However, after fees, Mindy's investment is only worth $104.98.