Glossary · Costs
TER
Total Expense Ratio
An older measure of a fund’s yearly running costs, still quoted by many ETF providers and broadly comparable with the ongoing charges figure.
The TER expresses a fund’s yearly operating costs as a percentage of its assets. In UK and EU fund documents it was largely replaced in 2012 by the ongoing charges figure (OCF), which is worked out on a similar basis, but ETF providers often still quote a TER.
Neither figure includes the cost of buying and selling the fund’s holdings, which is published separately as transaction costs, or what a platform charges. The total cost of holding a fund is therefore higher than the TER or OCF alone.
Related terms
- OCFThe annual cost of running a fund, expressed as a percentage of the money you have invested in it.
- Fee dragThe cumulative amount a fund’s ongoing charges remove from a holding over a period, compounded.
- Tracking differenceHow far a fund’s return differed from the return of the index it tracks over a period — usually a small shortfall close to its charges.
Definitions describe how a term is used on Fundology. This is information, not advice.