Expense Ratio
InvestingThe annual fee charged by a fund as a percentage of assets under management, covering operating costs.
Example
Example: You invest $100,000 in Fund A (0.03% expense ratio) and $100,000 in Fund B (0.75% expense ratio). Both earn 8% gross return. After 30 years: Fund A grows to $961,000 (you paid $9,000 in fees). Fund B grows to $808,000 (you paid $162,000 in fees). The 0.72% fee difference cost you $153,000. Use our fee impact calculator.