Expense Ratio — Definition

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What is an Expense Ratio?

Generally associated with mutual funds and exchange traded funds, the expense ratio represents the total annual management fee.

The expense ratio is the annual management fee charged to shareholders by ETFs and mutual funds. The annual fee typically comprises the annual management fee, 12b-1 fees (which are associated with research costs), operating costs, and all other administrative type fees that go into the product. The expense ratio encompasses all of these fees as one percentage.

What is Turnover Ratio?
What is the Current Ratio/Liquidity Ratio?
What is the Price to Earnings Ratio (P/E Ratio)?

Keywords: mutual funds, Exchange Traded Funds (ETFs), fees, operating expenses, 12b-1, expense ratio, turnovers, turnover ratio,

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