TER (Total Expense Ratio)
The yearly cost of owning a fund, expressed as a percentage of your invested amount.
The TER bundles a fund's annual running costs, management, administration, and operating fees, into a single percentage deducted from your investment each year. Even small differences compound dramatically over decades, which is why low-cost index funds and ETFs are so attractive. A fund charging 1.5% versus one charging 0.2% can cost you tens of thousands over a lifetime of investing. Always check the TER before buying a fund; it is one of the few costs you can fully control. Assetli helps you see how fees eat into your real returns.
Example
On a $50,000 investment, a 0.2% TER costs $100 a year, while a 1.5% TER costs $750 a year, a $650 annual difference for similar exposure.
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Related terms
ETF (Exchange-Traded Fund)
A fund that holds a basket of assets (stocks, bonds, or commodities) and trades on a stock exchange like an individual stock.
Index Fund
A fund that passively tracks a market index, offering broad diversification at very low cost.
Diversification
The practice of spreading investments across different assets, sectors, and geographies to reduce the impact of any single investment's poor performance.
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Dollar-Cost Averaging (DCA)
An investment strategy of regularly investing a fixed amount regardless of market price, reducing the impact of volatility over time.
Compound Interest
Interest earned on both the initial principal and the accumulated interest from previous periods, creating exponential growth over time.
FIRE (Financial Independence, Retire Early)
A financial movement focused on aggressive saving and investing (often 50–70% of income) to achieve financial independence and the option to retire decades earlier than traditional retirement age.
Net Worth
The total value of all your assets (cash, investments, property) minus all liabilities (loans, mortgages, credit card debt).
Asset Allocation
The strategy of dividing investments among different asset classes — stocks, bonds, real estate, cash — to balance risk and return according to your goals and risk tolerance.
Dividend Yield
The annual dividend payment of a stock or fund expressed as a percentage of its current price.