What is Expense Ratio?
Expense Ratio A measure of the total annual operating expenses of an investment fund, expressed as a percentage of average assets under management. Used by investors and regulators to assess cost efficiency.
Source: CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework
How is “Expense Ratio” Used in Practice?
Investors often compare the expense ratio of mutual funds and ETFs to identify cost-efficient products and optimize net returns.
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Who Needs to Know This Term?
- Financial Analysts
- Bankers
- Traders
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What is Expense Ratio?
A measure of the total annual operating expenses of an investment fund, expressed as a percentage of average assets under management. Used by investors and regulators to assess cost efficiency.
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