Expense Ratio
Quick definition: The expense ratio is the yearly fee a fund charges, shown as a percentage of the money you have invested in it.
In plain English
Every fund has running costs. The expense ratio is that cost expressed as a yearly percentage of your investment. It is taken from the fund’s assets, so you never see a separate bill.
Example
A fund with a 0.50% expense ratio costs $50 a year on $10,000. A fund with a 0.10% ratio costs $10.
Why it matters
Small differences compound over decades. A lower fee leaves more of the return with you. Use the fee impact calculator to see the effect.
Common mistakes
- Looking only at the headline return and ignoring the fee.
- Forgetting that fees change, so check the fund’s website for the current figure.
Investment Disclaimer
All information and tools on this website are provided for informational
purposes only. The calculations, examples, and projections are simplified
estimates and may not reflect real-world investment results.
Nothing on this website should be interpreted as financial, investment,
tax, or legal advice. You are solely responsible for your investment
decisions and any outcomes resulting from them.
Past performance and projected returns do not guarantee future results.
Always conduct your own research and consult a qualified financial advisor
before making investment decisions.