Expense ratio — meaning explained

Expense ratio: The yearly fee a fund charges.

What it means

A 0.05% ratio costs $0.50 per $1,000 a year; a 1.5% one costs $15. Over decades that difference can eat a huge chunk of your returns.

Category

Money — part of the free InvestED Academy investing glossary for teens.

See it in action

Practise with real prices and fake money in the market simulator, or start the free course at module one.