0.60-0.75 are not high expense ratio. It's higher than usual ETFs, but it's still not bad. If you go to a bank and buy actively managed mutual funds (the product they really want you to buy), it's most likely in the 1.00-2.00% range. This is a high expense ratio !
Typically, any expense ratio higher than 1 percent is high and should be avoided. Over an investing career, a low expense ratio could easily save you tens of thousands of dollars, if not more.
Is 0.8 expense ratio high? For an actively managed fund, a 0.8% TER is considered relatively low. However, always compare TERs within similar fund categories. An index fund with a 0.8% TER might be considered slightly high compared to others in the same category.
What is a good expense ratio? Typically, ETFs have lower expense ratios than mutual funds. Generally, low-cost equity ETFs will have a net expense ratio of no more than 0.25%. Low-cost equity mutual funds will have expense ratios of 0.5% or lower.
Generally, for an actively managed fund, good expense ratios range between 0.5% and 0.75%. Anything above 1.5% is considered high.
Low expense ratio: VOO has an expense ratio of 0.03%, one of the lowest among S&P 500 ETFs. This is cost-effective as the value of the investment grows over time.
“An operating expense ratio around 65% is a desirable range that sets producers up for success,” shares Bowen. “For corn and soybean operators, the standard is typically between 70% and 75%. However, with current market conditions, 80% is more typical of what we're seeing today.”
It can depend on the type of fund. Equity mutual fund expense ratios average 0.42%, according to 2023 data from the Investment Company Institute. Hybrid funds average 0.58% and bond funds average 0.37%. 4 A mutual fund expense ratio that is at or below the average is ideal.
Investors generally look for a 'good' expense ratio when selecting MFs. Good expense ratios can vary depending on whether the fund is actively or passively managed. Typically, expense ratios between 0.5% and 0.75% are considered 'good' for actively managed funds. Ratios above 1.5% are considered high.
The Rule of 72 is a simple way to estimate how long it will take your investments to double by dividing 72 by your expected annual return rate. Higher-risk investments like stocks have historically doubled money faster (around seven years) compared with lower-risk options like bonds (around 12 years).
SPY is more expensive with a Total Expense Ratio (TER) of 0.0945%, versus 0.03% for VOO. SPY is up 28.31% year-to-date (YTD) with +$7.13B in YTD flows. VOO performs better with 28.36% YTD performance, and +$103.99B in YTD flows.
Imagine, for example, that a fund carries an expense ratio of 0.25. That means that for every dollar you invest into the fund, you will pay 0.25 percent in fees each year. In other words, for every $10,000 you invest in the fund, you'll be on the hook for $25 worth of fees.
High fees can turn any investment into a poor one. A good rule of thumb is to not invest in any fund with an expense ratio higher than 1% since many ETFs have expense ratios that are much lower.
From the investor's perspective, an effectively managed portfolio's expense ratio should be between 0.5% and 0.75%. A high expense ratio is one that is larger than 1.5 percent. This means that for every $100 you invest in the fund, you can expect to pay no more than $1 in fees and expenses.
According to Morningstar, the average ETF price is 0.45%. So, at first sight, any ETF expense ratio above that value has to justify its costs with an outstanding performance.
Fund B has an expense ratio of 0.75%. Again, this tells us that it is likely an actively managed fund and that we pay $75 for every $10,000 we invest. While that doesn't sound like a lot, it can add up over the course of 30 years, or once you have hundreds of thousands of dollars invested.
50% of your net income should go towards living expenses and essentials (Needs), 20% of your net income should go towards debt reduction and savings (Debt Reduction and Savings), and 30% of your net income should go towards discretionary spending (Wants).
For a typical 401(k) plan, the expense ratio should be no higher than 2% and more likely in the 1.0% to 1.5% range. The lower the expense ratio the better, with higher fees eating into profits.
The gross expense ratio includes all fees and expenses incurred by the fund, such as management fees, administrative costs and operational expenses. While the net expense ratio reflects the actual cost to investors after accounting for any temporary fee reductions or reimbursements by the fund's management.
Invesco QQQ's total expense ratio is 0.20%. Investment returns and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. Current performance may be higher or lower than performance quoted.
If the fund had a 3-year annualized pre-tax return of 10%, an investor would have taken home roughly 8% on an after-tax basis. Tax cost ratios typically fall within the range of 0-5%. A 0% tax cost ratio means the fund had no taxable distributions, while a 5% ratio suggests the fund was less tax efficient.
Motilal Oswal Flexi Cap Fund and Motilal Oswal Small Cap Fund gave 50.23% and 49.29% returns respectively in the mentioned period. Motilal Oswal Large & Midcap Fund offered 48.84% return in the same time period. HDFC Defence Fund, the only active fund based on defence sector, delivered 48.75% return in 2024.
The Vanguard S&P 500 ETF has had a total return of 257% over the past decade. Another huge benefit of this particular ETF is that it has a very low expense-ratio fee of just 0.03%. That means if you invest $1,000, you'll pay just $0.30 in fees, and $10,000 invested in the fund will cost you only $3.