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 !
Generally, for an actively managed fund, good expense ratios range between 0.5% and 0.75%. Anything above 1.5% is considered high.
“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.”
Q: Is the 0.8 expense ratio good? The ideal expense ratio depends on the various factors. If the returns are not too high, the 0.8 expense ratio can be considered high for a few funds. Usually, an expense ratio above 1% is considered high.
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.
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.
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.
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.
OER is used for comparing the expenses of similar properties. An investor should look for red flags, such as higher maintenance expenses, operating income, or utilities that may deter them from purchasing a specific property. The ideal OER is between 60% and 80% (although the lower it is, the better).
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).
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.
Ratios over that are generally considered high. A good ratio is generally viewed as one between 0.5% and 0.75%, balancing cost and value. Note that, because portfolios of actively managed funds must be managed in real time, those funds usually have greater expense ratios than passively managed funds.
Bottom Line. The gross expense ratio can offer you a comprehensive view of all the potential costs that a fund may incur, while the net expense ratio reflects the actual costs investors will pay after any fee waivers or reimbursements.
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.
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.
Berkshire Hathaway owns two exchange-traded funds (ETF), The SPDR S&P 500 ETF Trust (NYSEMKT: SPY) and the Vanguard S&P 500 ETF (NYSEMKT: VOO). Both of these ETFs track the S&P 500.
For example, you might buy SPY if you want to trade actively, or even venture into day trading, because of its high volume. You might consider buying VOO to hold over the long term because of its lower expenses.
Average Return
In the past year, QQQ returned a total of 25.74%, which is slightly higher than VOO's 24.33% return. Over the past 10 years, QQQ has had annualized average returns of 18.26% , compared to 13.04% for VOO. These numbers are adjusted for stock splits and include dividends.
Expense ratios ranging from 0.5% to 0.75% are often considered to be low. Expense ratios of above 1.5% are very high and can quickly eat into your returns. Most actively managed mutual funds have expense ratios ranging from 0.5% to 1.5%, whereas most passively managed funds are in the range of 0.2% to 0.5%.
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.
Buy and sell: *Vanguard average ETF and mutual fund expense ratio: 0.08%. Industry average ETF and mutual fund expense ratio: 0.44%. All averages are asset-weighted.
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).
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.
For instance, a passively managed fund with an expense ratio of 0.9% wouldn't be ideal as it is almost five times higher than the average. However, an actively managed fund with the same expense ratio of 0.9% would be considered good.