Enter the total fund expenses and average net assets into the calculator to determine the expense ratio; this calculator can also evaluate any of the variables given the others are known.

Etf Expense Ratio Formula

The following formula is used to calculate the expense ratio for an ETF (Exchange-Traded Fund):

Expense Ratio = (Total Fund Expenses / Average Net Assets) * 100


  • Expense Ratio is the percentage of the fund’s assets that are used to cover operating expenses
  • Total Fund Expenses is the total amount of money spent on operating the fund
  • Average Net Assets is the average value of the fund’s assets over a specific period of time

To calculate the expense ratio, divide the total fund expenses by the average net assets. Multiply the result by 100 to convert it to a percentage.

What is an Etf Expense Ratio?

An ETF (Exchange Traded Fund) expense ratio is a measure of what it costs an investment company to operate an ETF. It includes various operational costs such as management fees, administrative services, record keeping, and custodial services. The expense ratio is calculated by dividing the fund’s operating expenses by the average dollar value of its assets under management (AUM). It is expressed as a percentage and deducted from the fund’s assets, reducing the return to investors. For example, if an ETF has an expense ratio of 0.5%, that means you’ll pay $5 in annual fees for every $1,000 you invest. It’s important for investors to consider the expense ratio because it directly impacts the returns they can expect from their investment. Lower expense ratios typically mean higher returns for the investor, all else being equal.

How to Calculate Etf Expense Ratio?

The following steps outline how to calculate the ETF Expense Ratio.

  1. First, determine the total expenses of the ETF ($).
  2. Next, determine the average net assets of the ETF ($).
  3. Next, divide the total expenses by the average net assets.
  4. Finally, multiply the result by 100 to get the ETF Expense Ratio (%).
  5. After inserting the variables and calculating the result, check your answer with the calculator above.

Example Problem:

Use the following variables as an example problem to test your knowledge.

Total expenses of the ETF ($) = 500

Average net assets of the ETF ($) = 10,000