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 ($)
- TA is the total fund assets ($)

## 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?

**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

**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

**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.