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Expense Ratio
Term category: Mutual Funds
In 10 words or less:  A percentage of your investment that is paid in fees to the investment manager.

Definition: This is the percentage of total investments that investors in mutual funds have to pay to cover the fund's operating expenses and management fees. Most funds will deduct this total from your account yearly.

StockJargon Advice: The expense ratio varies from fund to fund and it can have a pretty large impact on your total rate of return, so be careful not to invest in a mutual fund with a high expense ratio (unless you're really sold on it).

Common stock funds require lots of attention by management so they command higher expense ratios. Index funds and bond funds require much less work by the fund company so they typically have lower expense ratios.

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