- The expense ratio is a measure of mutual funds’ operating costs relative to assets.
- Investors look at cost ratios to determine if a fund is the right investment for them after considering fees.
- Expenditure ratios can be specified as gross expense ratio, net expense ratio and expense ratio after reimbursement.
- Passive index funds will have lower expense ratios than actively managed funds or funds with less liquid asset classes.
- In general, the expenditure indicators of funds have been declining over the past few years.