ETF costs compared: what TER really means

The total expense ratio (TER) is the best-known cost measure for ETFs. But it doesn't tell the whole story. We explain what investors really need to keep an eye on.

TER vs. total costs

Beyond the TER, ETF investing incurs additional costs: bid-ask spreads when trading, taxes on distributions and, for replicating ETFs, also rebalancing costs. An ETF with a TER of 0.07% can in practice be more expensive than one with a TER of 0.20%.