See how small fees can make a huge difference over time.
An expense ratio is an annual fee charged by mutual funds and exchange-traded funds (ETFs) to cover their operating costs. It's expressed as a percentage of your investment. Think of it like a tiny, slow leak in a bucket of water. A small leak might not seem like a big deal at first, but over many years, you could lose a surprising amount of water!
This fund is actively managed by professionals, which results in a higher fee.
1.25%
Expense Ratio
This fund passively tracks a market index, keeping its costs very low.
0.10%
Expense Ratio
The Scenario
Both funds start with an initial investment of $10,000 and earn the same average gross return of 7% per year for 25 years. The only difference is the fee!