By Ori @FeeX
Expense ratio fees — the cost of managing an investment, taken as a percentage of the total amount of money you’ve invested in a fund, per year — are among the most notorious of these fees.
Though expense ratio fees are disclosed on fund prospectuses and annual reports, people often aren’t looking for fees in those documents at all, or they aren’t aware that “expense ratio” means a fee (and one that comes out of their balance before they even see it).
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That’s why seeing an expense ratio as a percentage without context or a minimal dollar amount can be so misleading — FeeX shows you expense ratios as actual dollars coming out of your savings over time, and compounding as they do so.
Suddenly, a meaningless percentage is visible as a real dollar amount, one that represents up to a third of your savings leaking from your retirement account.
Another facet of expense ratios that people might not know is that they are flexible and can change over time—another number that gets put in annual reports. If your expense ratio goes down, that’s a good thing, of course. But expense ratios can go up too, and some might hope you aren’t paying attention.
We dug into the FeeX database to find the mutual funds that have had the biggest increases in their expense ratios — the difference in some of these expense ratios can mean thousands of extra dollars leaking from your savings. Is your fund on our list of the top ten?
You don’t need to monitor changes in your funds’ expense ratio every year in their annual reports — FeeX now does that for you. Our new feature notifies you when there’s a change in the expense ratio of any of your retirement investments — you’ll get an email telling you when a change in the fee has been reported, whether that’s a decrease (so you can celebrate) or an increase (so you can see if you need to reduce your fees using FeeX’s suggestions).
Getting this fee monitoring is easy: just sign up for a free FeeX account, link your retirement accounts, sit back, and relax. We’ve got your fee changes under control.