What Is a Good ETF Expense Ratio?

If you’re interested in investing in exchange-traded funds (ETFs), you have probably heard something about expense ratios. If you want to learn more about ETF expense ratios, then you’re in the right place.

An ETF’s expense ratio indicates how much of your investment in a fund will be deducted annually as fees. A fund’s expense ratio equals the fund’s operating expenses divided by the average assets of the fund.

Typical ETF expense ratios are less than 1%. That means that, for every $1,000 you invest, you pay less than $10 a year in expenses.

Definition: What is an expense ratio?