Expenses Ratio

The expenses ratio is a measurement that shows what percentage of a fund's assets are used to cover operational costs, such as management fees, administrative charges, and other expenses. It helps investors understand the cost of maintaining the fund. For example, an expense ratio of 1% means that annually, 1% of the fund's assets are used for expenses, which is then subtracted from the fund’s returns. A lower expense ratio generally indicates a more cost-efficient fund, potentially leading to higher net returns for investors over time.