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  2. Glossary
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  4. Expense Ratio

Expense Ratio

The operational costs that are associated with a mutual fund, Expense Ratio is a term that refers to the amount of money that a fund has available to spend in relation to its profits. In some cases, this ratio can also be used to relate the total of the actual value of the fund and the fund’s profits. An Expense Ratio relates to real estate investment particularly in several different ways. It may refer to a mutual fund that was created for the purpose of developing an area or a mutual fund that invests in real estate in general, including real estate that is going to be resold for potential profits or property that is used for the purpose of collecting rent. The Expense Ratio is an important number to consider because it allows investors to see if the profits are being managed appropriately in terms of costs associated with maintenance and marketing. The Expense Ratio can also be used to determine whether a fund is undervalued or over-valued.