Expense Ratio Calculator

Formula

The formula to calculate the expense ratio is:

\[ E = \frac{TC}{TA} \]

Where:

E is the expense ratio
TC is the total fund costs ($)
TA is the total fund assets ($)

What is an Expense Ratio?

The expense ratio of a fund is defined as the ratio of total fund costs to the total value of the fund’s assets. It measures the amount of the fund's assets that are used for administrative and other operating expenses. A lower expense ratio indicates a more efficiently managed fund.

Example Calculation

Let's assume the following values:

Total Fund Costs (TC): $50,000
Total Fund Assets (TA): $10,000,000

Step 1: Divide the total fund costs by the total fund assets:

\[ E = \frac{50000}{10000000} = 0.005 \]

The Expense Ratio (E) is 0.005 or 0.5%.