An expense ratio is a reoccurring yearly fee you pay to invest. For example, if a fund has an expense ratio of .67%, or 67 basis points, you can expect to pay an annual operating expense of $6.70 for every $1,000 you invest in that fund. The important thing to remember is that the lower the expense ratio, the less you’re paying in fees, so more of your money stays invested and has a chance to grow over time.
