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An expense ratio is the cost of owning a mutual fund or ETF. Think of the expense ratio as the management fee paid to the fund company for the benefit of owning the fund. The expense ratio is ...
For example, ticker symbol VOO, the Vanguard ETF that attempts to replicate the S&P 500, has an expense ratio of 0.03%, meaning that for every $1,000 you have invested in the fund, you will “pay ...
The expense ratio of a stock or asset fund is the total percentage of fund assets used for administrative, management, advertising (12b-1), and all other expenses. An expense ratio of 1% per annum means that each year 1% of the fund's total assets will be used to cover expenses. [1] The expense ratio does not include sales loads or brokerage ...
What is an expense ratio? And how does it affect your investment portfolio? Learn more about the effect of costs vs funds with investment accounts in this article.
Total expense ratio. The total expense ratio (TER) is a measure of the total cost of a fund to an investor. Total costs may include various fees (purchase, redemption, auditing) and other expenses. The TER, calculated by dividing the total annual cost by the fund's total assets averaged over that year, is denoted as a percentage.
Investment performance. Investment performance is the return on an investment portfolio. The investment portfolio can contain a single asset or multiple assets. The investment performance is measured over a specific period of time and in a specific currency. Investors often distinguish different types of return.
The expense ratio is one of those essential terms. Stocks don't have expense ratios, but funds do: mutual funds, exchange-traded funds (ETFs) and index funds.
e. An exchange-traded fund ( ETF) is a type of investment fund that is also an exchange-traded product, i.e., it is traded on stock exchanges. [1] [2] [3] ETFs own financial assets such as stocks, bonds, currencies, debts, futures contracts, and/or commodities such as gold bars. Many ETFs provide some level of diversification compared to owning ...