Enter the total fund costs and the total fund assets into the calculator to determine the expense ratio.

Expense Ratio Formula

The following formula is used to calculate an expense ratio. 

E = TC / TA
  • Where E is the expense ratio
  • TC is the total fund costs ($)
  • TA is the total fund assets ($)

To calculate the expense ratio, divide the fund costs by the fund assets.

Expense Ratio Definition

The expense ratio of a fund is defined as the ratio of total fund costs to the total value of the fund’s assets.

Expense Ratio Example

How to calculate expense ratio?

  1. First, determine the total costs.

    Calculate the total fund costs associated with the fund. For this example, we will say the total fun costs is $10,000.00

  2. Next, determine the total assets.

    Using the same method, determine the total assets. For this example, we will assume the assets are $100,000.00

  3. Finally, calculate the expense ratio.

    Using the formula we find the expense ratio to be 10,000/100,000 = .10.

FAQ

What is an expense ratio?

An expense ratio is an annual fee that all funds charge their shareholders. It’s a ratio of that annual fee to the total assets of the fund.

What is a good expense ratio?

There is no set expense ratio that is considered a good value, but the lower the ratio the better it is for the shareholder.

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expense ratio formula