Expense Ratio

The expense ratio is a fund’s operating expenses divided by its average net assets.  It is calculated annually. Costs incurred from the fund’s trading activities are not included in the operating expenses. Operating expenses of a fund include legal, accounting and auditing fees, but mostly consist of fees paid to the fund manager/investment advisor. Operating expenses vary widely, with index ETFs and index funds in generally being lower and some actively managed funds being higher.

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