diligent in application or attention; persevering; assiduous. 2. persistently or carefully maintained: sedulous flattery.
DEFINITION of 'Expense Ratio'. A measure of what it costs an investment company to operate a mutual fund. An expense ratio is determined through an annual calculation, where a fund's operating expenses are divided by the average dollar value of its assets under management. Operating expenses are taken out of a fund's assets and lower the return to a fund's investors. Also known as management expense ratio (MER). Next Up.
In the case of funds with smaller assets, the gross total expense ratios may be much higher than net total expense ratios. This is true because certain fixed costs, such as legal and custodian fees, have a disproportionate impact on the expense ratio of a smaller fund in comparison to a larger fund. Mutual fund families also may choose to waiver fees to make the pricing of a fund more competitive.