Definition
The expense ratio (often called TER) is the fund’s annual operating cost expressed as a percentage of assets. If TER is 0.10%, you pay roughly $1 per year for every $1,000 invested — before any trading commissions or taxes.
Fees are not “bad” by themselves; they should be judged next to tracking quality, liquidity, tax efficiency for you, and whether the index matches your plan.
Why it matters
Small differences add up over decades — but the biggest mistakes usually come from the wrong exposure, not from 0.03% vs 0.06%.
How Cognitor helps you research
Cognitor’s weekly dossiers focus on scenario, concentration, and multi-lens tension. TER is one line in vehicle quality — helpful, never the whole story.