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When investors consider putting their money in a mutual fund, one of the most important factors to consider is the total expense ratio (TER). This is because fund houses charge management fees and other expenses in addition to the performance of the fund, and these expenses are included in the TER. The TER is expressed as a percentage of the fund's total assets and is an important factor in determining a fund's performance over time.
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Investment fees for 401(k) retirement plans declined by .03% in 2022 from the previous year. According to a recent study, the average expense ratio of 0.77% for investing in equity mutual funds was lower than the expense ratio of 1.08% the previous year. This means that investors are getting more bang for their buck when investing in mutual funds.
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It's important to note that not all mutual funds are created equal. Some funds may have higher expense ratios than others, while some funds may have lower ones. For example, services, mutual funds, insurance companies, banks, and other financial sponsors may pay fees based on asset levels or number of accounts managed. This means that the expense ratio for a particular fund may be higher than average.