An expense ratio is a measure of how much a company spends on operating expenses in relation to its overall revenue. This ratio is used to assess how efficiently a company is run and can be used to compare companies within the same industry. A lower expense ratio indicates a more efficient company.
What does TER mean? TER is an acronym for total expense ratio. It is a measure of the total annual operating expenses of a mutual fund or other investment vehicle, expressed as a percentage of the fund's average net assets. The total expense ratio includes both the management fee and all other operating expenses of the fund.
How is TER deducted? TER, or total expense ratio, is the percentage of a fund's assets that go towards paying expenses. This includes things like management fees, administrative costs, and other operational expenses. The rest of the assets are used to pay for the fund's investments.
TER is calculated by taking the total expenses for the fund and dividing it by the total assets of the fund.
For example, if a fund has total expenses of $100 and total assets of $1,000, the TER would be 10%.
TER can be a useful metric for investors to use when comparing different funds. A lower TER indicates that a fund is more efficient in terms of how it uses its assets to pay for expenses.
Investors should be aware that TER is not the only factor to consider when choosing a fund. Other factors such as investment performance and risk should also be taken into account. What is a good expense ratio for a business? There is no definitive answer to this question since it depends on a number of factors, including the specific industry in which the business operates, the size of the business, and its financial goals. However, a good rule of thumb is that a business should aim for an expense ratio that is lower than the industry average.
How does expense ratio affect return calculator? The expense ratio is the percentage of a fund's assets that are used to cover expenses, and it affects the return calculator in two ways. First, it reduces the overall return of the fund by the percentage of expenses. For example, if a fund has an expense ratio of 1%, and it generates a return of 10%, the net return to investors would be 9%. Second, the expense ratio affects the return calculator by reducing the amount of assets available to generate investment returns. For example, if a fund has an expense ratio of 1% and $100 million in assets, then only $99 million is available to generate returns. What is a good total expense ratio? A good total expense ratio (TER) is one that is low relative to the average total expense ratio of similar funds. The total expense ratio is the percentage of a fund's assets that are used to cover expenses, and it includes both operational expenses (e.g., management fees) and marketing expenses (e.g., 12b-1 fees).