It seems like the funds in the RiverPark family all have an expense ratio of at least 1.25% (for the retail class). RiverPark Short Term High Yield RPHYX has over $800 million in assets. I recall it was unlikely to lower its expense ratio because of the amount of work involved with its strategy, plus the inherent limit on its manageable assets.
However, RiverPark/Wedgewood RWGFX now has $1.1 billion in assets and doesn't seem like a particularly costly strategy, but it's expense ratio has been 1.25% since day one. 1.25% is not outrageous, but there are quite a few decent large cap offerings with lower expense ratios.
I would have thought RWGFX might have lowered its expenses over time, but given that the 1.25% seems to be the lower bound for all the RiverPark funds, perhaps they have no plans to reduce expenses for any of their funds, regardless of size?
Comments
Regards,
Ted
That's the way lots of fee waivers work. The management company agrees to a cap on the total expenses, waiving fees if necessary. But as "real" expenses drop, the management company gets paid back; consequently the total fund expenses don't decline. The normal management fee is 0.65%, and right now it looks like they're getting reimbursement payments that amount to an extra 10%, or about 0.07% "advisory waiver recapture".
That means that if they had not waived the fees, they would not be reclaiming the money now, and the expenses would be about 0.07% lower.
• Gross Expense Ratio before waivers/reductions: 1.37%
• Net Expense Ratio after waivers/reductions: 1.25%
• Category Average: 1.14%
• YTD Return as of 07/31: 1.79%
• Distribution Yield (Trailing Twelve Month) 3.57%
• Availability: Available to Existing Shareholders
See my post below. RPHYX is also paying the manager extra money - in the case of this fund, approximately 0.03% of AUM. That is, without the reimbursement of waived fees, the ER of the fund would currently be around 1.22%. Not a big deal, but indicative that sooner or later, expenses even on this fund should drop, if ever so slightly.
The funds' Annual Reports and Prospectus contain a wealth of information on the subject (RiverPark Wedgewood incurred $40k in printing costs, RiverPark Large Growth just $2,000).
The RiverPark folks believe that they are bringing hedge fund-style products to "the mass affluent." They believe that they've chosen managers carefully, that they reward them richly enough to lure them over from the Dark Side, and that they produce value in excess of expenses. That is, they quite earn what they're paid. As a result, I suspect that RiverPark won't voluntarily get involved in a "rush to the bottom" when it comes to expenses but that they'll try to stay reasonable.
For what it's worth,
David
Also, it looks like RPHYX will burn through the its advisor waiver recapture by 2016, at which point the expense ratio will drop (but not by a lot).