A fund’s expense ratio is listed as a percentage, and represents the percent of your investment that you are charged for investing in the fund. The expense ratio, expressed as a percentage, is a management fee that is deducted from the fund's assets. For example, let’s say that a particular mutual fund has an expense ratio of 0.50%. Expense Ratio. An Expense Ratio is the fee charged by a fund (either a mutual fund or ETF) for managing the fund’s assets. Management Fees vs. Management Expense Ratio: An Overview . Both of the investments have associated expense ratios. An expense ratio is an annual fee expressed as a percentage of your investment — or, like the term implies, the ratio of your investment that goes toward the fund’s expenses. An expense ratio reflects how much a mutual fund or an ETF (exchange-traded fund) pays for portfolio management, administration, marketing, and distribution, among other expenses. Unlike the sales charges, this cost applies to all mutual funds. Surrender Charges. Mutual funds are a great way to invest in the stock and bond markets without incurring specific stock risk. For accurate expense ratio comparisons, examine the charges of funds in the same category. This will likely come with administrative prices, advertising and paying fund managers. These expense ratios are calculated by taking a small percentage of your total portfolio value. Whether or not you spend money on a mutual fund thru an employer-sponsored retirement plan or development Portfolio, you are going to undergo expense ratios. An expense ratio is the fund's annual operating expenses, expressed as a percentage of assets. The expense ratio is deducted from the assets you have invested in the fund, making this an indirect cost of owning an annuity. When researching or looking at information on ETFs or mutual funds, one of the first pieces of information to look for is the expense ratio. While these fees are relatively small for robo-advisors, they can be high for human financial advisors. The expense ratios quilt all charges related to an ETF or mutual fund. Expense Ratios and How ETF Fees Work . Expense ratios don't include transactional fees or costs related to sales, such as shareholder fees charged to buy or sell fund shares or to compensate brokers. These rates vary wildly, but most won’t exceed 2.5%. An expense ratio is simply the ongoing cost of investing in a mutual fund or exchange-traded fund (ETF), and it’s charged as a percentage of the money you have invested the fund. They are strictly operational expenses. At any point, you may want to sell some or all of your ownership in an annuity for cash. You'll almost always see it expressed as a percentage of the fund's average net assets (instead of a flat dollar amount). The expense ratio is the annual fee that all funds or exchange-traded funds charge their shareholders. 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