Economics Mutual Funds Questions Medium
The expense ratio of a mutual fund is a measure of the total annual costs incurred by the fund's management and operation, expressed as a percentage of the fund's average net assets. It includes various expenses such as management fees, administrative fees, marketing and distribution expenses, and other operating costs. The expense ratio is deducted from the fund's assets, reducing the overall returns that investors receive. It is an important factor to consider when evaluating the cost-efficiency of a mutual fund, as lower expense ratios generally indicate better value for investors.