Topic Guide
What Is Expense ratio?
Expense ratio is a subject covered in depth across 1 podcast episode in our database. Below you'll find key concepts, expert insights, and the top episodes to listen to — all distilled from hours of conversation by leading experts.
Key Concepts in Expense ratio
Expense ratio
The expense ratio is the annual fee charged by an investment fund, such as a mutual fund or ETF, to cover management and operating costs. This episode highlights its critical importance, explaining how even small percentages like 0.03% versus 1% can accumulate into "tens of thousands of dollars" over decades, profoundly impacting an investor's retirement savings.
What Experts Say About Expense ratio
- 1.Every investment fund charges a fee, known as the expense ratio, for holding your money.
- 2.Small expense ratios, such as 0.03% or 1%, can result in a difference of "tens of thousands of dollars" over decades.
- 3.Low-cost index funds typically feature tiny expense ratios, often around 0.03%.
- 4.Actively managed funds charge significantly more, closer to 1%, and generally "don't usually perform any better" than low-cost alternatives.
- 5.This single number, the expense ratio, has the power to "quietly shape your entire retirement" savings.
- 6.It is crucial to "always check" an investment fund's expense ratio before making an investment.