ETF Costs and TERs: Important Facts for Investors
Understanding TER: An Important Investment Metric
A total expense ratio (TER) is a critical metric used to evaluate the cost of exchange-traded funds (ETFs). It represents the annual percentage of an ETF's assets that are used to cover various expenses associated with managing and administering the fund. Lower TERs are generally preferable, as they translate into higher returns for investors.
Vanguard ETF as the Cheapest Option
The Vanguard FTSE Developed World UCITS ETF Distributing boasts an impressive TER of 0.12% per annum, making it the most cost-efficient ETF within its category. This means that for every EUR 10,000 invested, investors will only incur management and administrative costs of EUR 12 per year.
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