Principal SmallCap S&P 600 Index Fund has an expense ratio of 0.42 percent.
Fidelity® Small Cap Index Fund has an expense ratio of 0.02 percent.
A good expense ratio, from the investor's viewpoint, is around 0.5% to 0.75% for an actively managed portfolio. An expense ratio greater than 1.5% is considered high.
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%.
Typically, any expense ratio higher than 1 percent is high and should be avoided.
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.
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 total expense ratio (TER) of S&P 500 ETFs is between 0.03% p.a. and 0.15% p.a.. In comparison, most actively managed funds do cost much more fees per year.
Small Cap. Small-cap funds also tend to have expense ratios higher than the sought after 1.5% upper limit. Based on Morningstar research, the average expense ratio for a small-cap fund with assets greater than $5 million is 1.61%.
Merrill's expense ratios are quite low, ranging from 0.05% to 0.18% for its core portfolio (that range includes the expense ratios for the socially responsible portfolios as well). We prefer to see no fees, but Merrill's Guided Investing Fees are fairly standard.
Fidelity® 500 Index Fund has an expense ratio of 0.02 percent.
Mid Cap Mutual Funds: Up to 2. While you might get higher returns, the risk you expose yourself to is also higher. Small Cap Mutual Funds: Up to 2. Given how high the risk is with these mutual funds, it is best to limit yourself to a limited number of small cap mutual funds.
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.
The Expense Ratio (Net) includes interest expense of certain underlying Fidelity® funds. Excluding interest expense of the applicable underlying Fidelity funds, Total annual operating expenses are 0.71%.
Expense Ratios And Fees
Vanguard S&P offers a lower expense ratio (0.035%) than SPY (0.095%), which means lower costs for investors and potentially higher net returns over the long term.
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.
Even though these ETFs both have roughly a half trillion dollars of assets each, one is much more liquid than the other. VOO trades roughly $2 billion worth of shares on an average day. SPY trades more than $25 billion worth. That makes SPY much more liquid and makes it much cheaper to trade.
To keep costs low, Vanguard often uses a sampling strategy to construct its index funds using less than the total number of assets in an index. Vanguard offers funds that track a wide variety of market indices, large and small.