GlossaryETFs & Index Funds

Expense Ratio

The annual fee a fund charges, expressed as a percentage of the amount invested. Lower expense ratios leave more of the return with the investor — a key reason low-cost index funds are popular.

Related terms

ETF NAV Tracking Error

Related lessons

beginnerETFs & Index Funds

What Is An ETF?

A complete guide to exchange-traded funds: what they are, how they deliver instant diversification, how they track an index, why low costs matter so much, the main types, and the risks.

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