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What is an expense ratio?

An expense ratio is an annualized fee (expressed as a percentage of total assets) that funds charge their shareholders. It’s actually charged daily by deducting a very small fraction of the fund’s assets. It covers management fees, administrative expenses and other costs incurred to operate the fund. These costs are baked into the price of the fund, not charged separately. This is different than commissions or fees that a broker may charge to purchase the ETF itself. Basically, the fund sponsor has operational costs, and this percentage covers those costs.

When you invest with Stash, the expense ratio is already factored into the prices you see.

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