TER (Total Expense Ratio)
TER (Total Expense Ratio) is a fund’s total yearly cost, shown as a percentage of your holding. It is charged quietly from the fund every day, so you never get a bill, but it comes straight out of your return.
Why small numbers matter
Because the fee is charged every year and compounds against you, a difference that looks tiny, say 0.2% versus 1.5%, can quietly cost a large share of your final pot over a few decades. On a lifetime of saving, the fee is often the single biggest controllable drag on returns.
What is typical
Broad index funds are cheap, often a fraction of a percent. Actively managed funds cost more, and after fees most do not beat their index over the long run. The useful comparison is within the same fund type: cheapest global index fund against another, not against a bond fund.
Worked example
Two funds, same 100,000 kr invested for 30 years at 7% gross return. Fund A at 0.2% TER nets 6.8%: your pot grows to about 720,000 kr. Fund B at 1.5% TER nets 5.5%: about 498,000 kr. The 1.3 percentage-point fee gap costs you over 220,000 kr, more than double your original investment, purely in compounded fees.
Calculate further
- Fund fee calculator: see the gap on your own numbers
- Fund fee guide: how to find and compare TER
- Compound savings calculator: model long-term growth with your fee
Returns are never guaranteed, but a lower fee is. It is one of the few things you can control with certainty, so picking a low-TER fund is close to a free improvement to your long-term outcome.