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TER (total expense ratio)
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Total Expense Ratio – the annual total costs of a fund or ETF as a percentage. The lower the TER, the more return is left for you.
The TER (total expense ratio) shows the total annual costs of a fund or ETF. It is deducted automatically from the fund's assets – you don't pay it directly, but it reduces your return.
Comparison:
• ETFs: 0.05–0.50% TER (typical: 0.20%)
• Active funds: 1.00–2.50% TER (typical: 1.50%)
Why the TER matters so much: with €10,000 and a 0.20% TER you pay €20/year in fees. With a 1.50% TER it would be €150/year – 7.5 times as much! Over 30 years this difference adds up to tens of thousands of euros.
Did you know? The world's cheapest ETF has a TER of just 0.03% – with €10,000 invested, it costs you a mere €3 a year.
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