What is an expense ratio?

An expense ratio measures how much you’ll pay over the course of a year to own a fund. A high expense ratio can significantly impact your returns, and it pays for things like the management of the fund, marketing, advertising and any other costs associated with running the fund. Both mutual funds and ETFs charge an expense ratio.

What is a mutual fund Expense ratio?

The expense ratio is a measure of mutual fund operating costs relative to assets. Investors pay attention to the expense ratio to determine if a fund is an appropriate investment for them after fees are considered. Expense ratios may also be expressed as gross, net, and after-reimbursement expense ratios.

What is an ETF expense ratio?

Exchange-traded funds (ETFs) and mutual funds charge an expense ratio to shareholders to cover total annual operating expenses. The ETF expense ratio is expressed as a percentage of a fund’s average net assets and can include various operational costs such as: