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Expenses Explained All mutual funds have expenses, such as the cost of managing the fund's portfolio (the management fee), and the cost of operating the fund ('other' expenses, including accounting and administrative costs). Mutual fund expenses are fully disclosed in the fund's prospectus, and you'll find a fund's net and gross expense ratios alongside fund performance. In the table below, we've broken down the exact expenses of each FundX Upgrader Fund, as shown in the Fund's prospectus, to better illustrate the costs of each FundX Upgrader Fund and what is included in the net and gross expense ratios.
Net Expense Ratio - This is the sum of the Fund's management fee and other operating expenses, such as administrative and accounting costs, minus any possible fee waivers. The net expense ratio does not include acquired fund fees. Other Expenses – These are operating expenses that may include: shareholder servicing expenses; custodial expenses; legal expenses; accounting expenses; transfer agent expenses; and other administrative costs. Fee Waivers – There are certain fixed costs involved in managing a mutual fund, and when a fund’s asset base is small, those costs are spread out over a smaller number. This makes the costs as a percent of those assets higher. In that case, the fund's adviser may choose to pay a portion of the fund’s expenses. For example, the newest Fund in our family, the FundX Tactical Total Return Fund (TOTLX) was quite small at the start of this fiscal year, so its 'other' expenses are high as a percent its assets (2.94%). The fund’s manager, DAL, has elected to pay for most of those operating costs (-2.44%). This is called a fee waiver -- DAL is waiving this expense for shareholders. These fee waivers are included in (subtracted from) the net expense ratio. They are not included in (not subtracted from) the gross expense ratio, even though they are not paid for by shareholders. Acquired Fund Fees – These are the expenses of the underlying mutual funds and ETFs held in the FundX Upgrader Fund portfolios. As an institutional investor, DAL may be able to purchase lower cost fund changes that are not available to retail investors. Gross Expense Ratio – This is the sum of a Fund's management fee, other expenses, and the expenses of the underlying funds in the FundX Upgrader Fund portfolios, called "Acquired Fund Expenses." The gross expense ratio does not take into account fee waivers.
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