When presenting performance, what does the 'gross-of-fees' return typically represent?

Question: When presenting performance, what does the 'gross-of-fees' return typically represent?

Answer options:

• Returns after all investment management fees, trading costs, and other administrative expenses. ✅ Returns before investment management fees but after trading costs.
• Returns before any fees or trading costs are deducted.
• Returns after investment management fees but before trading costs.

Correct answer: Returns before investment management fees but after trading costs.

Explanation: Gross-of-fees returns typically refer to returns after actual trading expenses but before the deduction of the investment management fee. This allows for comparing the manager's skill before their compensation is factored in.