Annual cost of owning a fund, expressed as a percentage of assets.
Charged automatically out of fund returns. Fees compound dramatically over time — a 1% expense ratio over 30 years can reduce ending wealth by 25%+. Index funds typically charge 0.03-0.20%; active funds 0.50-1.50%. Always check expense ratio before buying any fund.
Annual cost of owning a fund, expressed as a percentage of assets. Charged automatically out of fund returns. Fees compound dramatically over time — a 1% expense ratio over 30 years can reduce ending wealth by 25%+. Index funds typically charge 0.03-0.20%; active funds 0.50-1.50%. Always check expense ratio before buying any fund.
In funds, Expense Ratio is one of the building blocks investors use to compare opportunities and assess risk. Understanding it helps you read research notes, earnings reports, and market commentary without getting lost in jargon.
Charged automatically out of fund returns. Fees compound dramatically over time — a 1% expense ratio over 30 years can reduce ending wealth by 25%+.
Looking for more financial terms?
Browse Full Glossary →