Expense ratio
The yearly fee a fund charges, as a percent.
The expense ratio is what a fund charges each year to run, taken as a percent of your money in it. You never see a bill; it comes out of the fund's returns.
Why small numbers matter
A fee of 1% sounds tiny, but it applies every year to your whole balance, including all your past growth. Over decades the gap between a 1% fund and a very cheap one can be tens of thousands of dollars.
Many broad index funds charge 0.10% or less; some charge under 0.05%.
ExampleOn $10,000, a 1% expense ratio costs $100 a year. A 0.05% ratio costs $5.