Expense ratio
The annual percentage a fund charges you to hold it — subtracted invisibly from returns.
Why it matters
A 0.05% expense ratio costs $5 per year per $10,000 invested; a 1.0% ratio costs $100. Over 40 years, the difference compounds into hundreds of thousands of dollars. Low expenses are the closest thing to a guaranteed return.
See also
Educational only — not financial, tax, or legal advice.