Investing & Markets

Expense Ratio

The annual fee a fund charges investors, expressed as a percentage of assets invested.

An expense ratio of 0.50% means an investor pays $5 per year for every $1,000 invested, deducted automatically from fund returns. Even small differences in expense ratios compound significantly over decades, making it one of the most important factors in long-term investment returns, especially for retirement accounts held over many years.

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