expense ratio

Definition

For a mutual fund, operating costs, including management fees, expressed as a percentage of the fund's average net assets for a given time period. The expense ratio does not include brokerage costs and various other transaction costs that may also contribute to a fund's total expenses.

Use expense ratio in a sentence

If you want to know how well you have done in that quarter you need to be able to calculate the expense ratio.

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The expense ratio provided keen and valuable insight into what was deemed the efficiency of the mutual fund management process.

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Lindaïs father passed away and left her some money. Linda has decided that sheïd like to invest it in a mutual fund. She decides to meet with an expert on the matter. After the expert presents Linda with various options of funds, Linda makes a decision and picks a few. Then, Linda asks the expert, ïHow much will I be charged? I know once I become a shareholder, Iïll have to pay a fee that will go towards the coverage of the fundsï total annual operation expenses? In other words, what will I be charged in expense ratio

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