Ask a Fool: Gross vs. Net Expense Ratio -- What's the Difference?

It's true that the expense ratio is an expression of a mutual fund's management fees, administrative expenses, and other costs all in a single number. For example, a 1% expense ratio means that you'll pay $10 per year in investment fees for every $1,000 in fund assets you have.

However, mutual fund prospectuses generally include two expense ratios: the gross expense ratio and the net expense ratio. Most of the time, the two numbers are the same. But they don't have to be.

The gross expense ratio accounts for all of the expenses associated with a fund. This includes the fees paid to the fund's managers, administrative expenses such as office space and employee salaries, and other costs like marketing expenses.

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Source Fool.com