What is a bad expense ratio for ETFs? (2024)

What is a bad expense ratio for ETFs?

Typically, any expense ratio higher than 1% is high and should be avoided, however it's important to note that many investors choose to invest in funds with high expense ratios if it's worth it for them in the long run.

What does 10% XIRR mean?

XIRR (Extended Internal Rate of Return):

XIRR considers the specific dates on which contributions are made and the amounts invested, as well as the final value of the investment, to calculate the annualized rate of return.

Is .07 expense ratio high?

Generally, for an actively managed fund, good expense ratios range between 0.5% and 0.75%. Anything above 1.5% is considered high.

What is a .04 expense ratio?

The expense ratio is how much you pay a mutual fund or ETF per year, expressed as a percent of your investments. So, if you have $5,000 invested in an ETF with an expense ratio of . 04%, you'll pay the fund $2 annually. An expense ratio is determined by dividing a fund's operating expenses by its net assets.

What is a reasonable ETF expense ratio?

A good rule of thumb is to not invest in any fund with an expense ratio higher than 1% since many ETFs have expense ratios that are much lower. Also, ETFs tend to be passively managed, which keeps the management fee low.

What does 20% XIRR mean?

XIRR is your personal rate of return. It is your actual return on investments. XIRR stands for Extended Internal Rate of Return is a method used to calculate returns on investments where there are multiple transactions happening at different times.

Is XIRR 20 good?

A 20% XIRR is considered to be a very good return for most investments. It is important to note that past performance is not indicative of future results, but a 20% XIRR over a sustained period of time would be very impressive.

What is considered a bad expense ratio?

Typically, any expense ratio higher than 1% is high and should be avoided, however it's important to note that many investors choose to invest in funds with high expense ratios if it's worth it for them in the long run.

What is the Vanguard expense ratio?

*Vanguard average mutual fund expense ratio: 0.09%. Industry average mutual fund expense ratio: 0.54%. All averages are asset-weighted. Industry average excludes Vanguard.

What is the expense ratio of the spy?

The SPY comes with an 0.09% expense ratio, which is the ETF equivalent of fund management fees.

What is the expense ratio for Vtsax?

Vanguard Total Stock Market has an expense ratio of 0.04 percent.

Is 0.2 a good expense ratio?

The average expense ratio is between 0.5% and 1.0%. Passive index funds: Expense ratios are often on the lower side. A typical expense ratio for passive index funds is 0.2%.

How do I know if my ETF is overpriced?

The price of an ETF share generally stays very close to NAV but if the share price is below the NAV, then the ETF is said to be trading at a discount. Conversely, if the ETF share price is more expensive than NAV, the ETF is said to be trading at a premium.

What expense ratio is too high for index funds?

Index funds should have the lowest fees, because they cost relatively little to run. You can easily find an S&P 500 index fund with an expense ratio of less than 0.2%, for example. For mutual funds that invest in large U.S. companies, look for an expense ratio of no more than 1%.

What does 30% XIRR mean?

As mentioned above, XIRR stands for Extended Internal Rate of Return. An Extended Internal Rate of Return (XIRR) calculates the total current value of an investment by applying a single rate of return to each instalment (or redemption). An investor's return rate is their XIRR.

Is 200% ROI double?

A project is more likely to proceed if its ROI is higher – the higher the better. For example, a 200% ROI over 4 years indicates a return of double the project investment, over a 4 year period. Financially, it makes sense to choose projects with the highest ROI first, then those with lower ROI's.

Is 200% a good ROI?

As these things add value, they bring a return on investment. Smart people realise that, whilst it is important to consider the cost involved when undertaking such a project, ROI is the real measure of how best to spend money. You've doubled your money, not bad going… An ROI of 200% means you've tripled your money!

What is 20 20 rule investing?

The 20% - Investments

As per the original budgeting rule, you must dedicate 20% of your income to savings & investments. However, if you have limited debt (lower than 20% of your salary) and limited wants (lower than 10% of your salary), you can invest 20-40% of your income.

What is the rule of 20 in investing?

The rule combines two key factors: the Price-to-Earnings (P/E) ratio and the expected earnings growth rate of a stock. In essence, the fair value P/E ratio should equal the expected earnings growth rate plus 20.

Is 20% return high?

A 20% return on investment (ROI) is generally considered excellent, especially in the long term. Positives: Significant growth: A 20% return means your investment has grown by 20% compared to its initial value. This can significantly increase your wealth over time, especially if compounded over many years.

What is the 10 year return of QQQ?

Invesco QQQ Market Price: YTD: 54.85%; 1YR: 54.85%; 3YR: 9.98%; 5YR: 22.40%; 10YR: 17.66%; Since Inception: 9.44%.

Is QQQ expense ratio too high?

An expensive investment

The Invesco QQQ Trust is a relatively inexpensive fund, given its 0.2% ETF expense ratio. However, the stocks in the fund are rather expensive. The Nasdaq 100 currently trades at 30.6 times earnings and 27.3 times the forward price-to-earnings (P/E) ratio.

Is there a minimum investment for ETFs?

What's the minimum investment? Because they trade like stocks, ETFs do not require a minimum initial investment and are purchased as whole shares. You can buy an ETF for the price of just one share, usually referred to as the ETF's "market price."

Does the price of an ETF matter?

In other words, a fund's NAV is its fair value. But unlike with mutual funds, ETF investors don't transact at NAV. Instead, ETF prices are determined by the market. An ETF's market price is the most important price for investors—the one at which they buy and sell shares in the secondary market.

Is 0.39 a good expense ratio?

It can depend on the type of fund. Equity mutual fund expense ratios average 0.47%, according to 2021 data from the Investment Company Institute. Hybrid funds average 0.57% and bond funds average 0.39%. 2 A mutual fund expense ratio that is at or below the average is ideal.