What is an ETF expense ratio?

An ETF's expense ratio indicates how much of your investment in a fund will be deducted annually as fees. A fund's expense ratio equals the fund's operating expenses divided by the average assets of the fund. Typical ETF expense ratios are less than 1%. That means that, for every $1,000 you invest, you pay less than $10 a year in expenses.

How do I know if an ETF has a net expense ratio?

You can find a fund's net expense ratio by entering the fund's ticker symbol on Yahoo Finance or other similar apps. The ETF page will display the net expense ratio and many other pieces of information about the ETF. If that expense ratio is above 0.24%, then it’s above the average for ETFs, specifically (not including mutual funds).

What is a mutual fund Expense ratio?

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. You'll almost always see it expressed as a percentage of the fund's average net assets (instead of a flat dollar amount).