Expense Ratio. Unlike the sales charges, this cost applies to all mutual funds. 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. For example, compare the expense ratios charged by a high-yield funds with the average charges of high-yield funds in the Investment Company Institute table below, and not with say an emerging market equities fund or a municipal bond fund. These expense ratios are calculated by taking a small percentage of your total portfolio value. Management Fees vs. Management Expense Ratio: An Overview . Expense Ratios and How ETF Fees Work . 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. 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. 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. While these fees are relatively small for robo-advisors, they can be high for human financial advisors. An Expense Ratio is the fee charged by a fund (either a mutual fund or ETF) for managing the fund’s assets. Surrender Charges. An expense ratio is the fund's annual operating expenses, expressed as a percentage of assets. This will likely come with administrative prices, advertising and paying fund managers. Both of the investments have associated expense ratios. 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. These rates vary wildly, but most won’t exceed 2.5%. 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. 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 ratios quilt all charges related to an ETF or mutual fund. The expense ratio is the annual fee that all funds or exchange-traded funds charge their shareholders. At any point, you may want to sell some or all of your ownership in an annuity for cash. For example, let’s say that a particular mutual fund has an expense ratio of 0.50%. The expense ratio is deducted from the assets you have invested in the fund, making this an indirect cost of owning an annuity. 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. 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