Just as the doctors were putting DR in front of their names, the engineers also started putting Er in front of their names.
The ER is a part of a hospital that provides emergency care for people with severe injuries or sudden illnesses.
More About Er. as Engineer :
The acronym Er, or abbreviation, was first used in India by Engineers in the early 1970s.
The engineers started putting Er before their names just as doctors did.
The engineering program was not available to all students in the 70s and 1980s. However, those who could do it were considered to be a major achievement.
At that time there were very few engineering colleges in India. Most of them were IITs. However, there were also other state-run engineering colleges where it was difficult to get into.
Although engineers and engineering have played a significant role in the growth of the country, the popularity of engineering has declined with the openings of many low-quality colleges and students pursuing engineering degrees that were not worthy of engineering.
Many engineers today put Er before their names. You can also find many of these people on social media.
Engineering students still get great jobs and a good salary today.
You can also see that engineers are working on many other great posts.
Many of the nation’s most successful individuals are engineers, including Raghuram Rajan and Arvind Kejriwal, Sundar Pichai, Sundar Pichai, Sundar Pichai, and Sundar Paichai.
What is an Er-Engineering course?
Engineering is Innovation. Engineering is doing something new.
Engineering is a 4-year program. Students can earn a degree in engineering by studying in their favorite engineering branch.
- Engineering in computer science
- Electrical engineering
- Mechanical Engineering
- Civil Engineering
- Chemical Engineering
- Aeronautical engineering
- Information technology
More About Er. as Expense Ratio :
What is an Expense Ratio?
An expense ratio (ER) is also known as the management expenses ratio (MER). It measures how much of a fund’s assets are used to pay administrative and other operating costs. A fund’s expenses are calculated by subtracting the average value of its assets (AUM) from its operating expenses. The fund’s operating expenses decrease its assets, which reduces the return to investors.
- The expense ratio (ER), is a measure for mutual fund operating costs relative assets.
- To determine whether a fund is a suitable investment, investors should pay attention to the expense ratio after considering fees.
- There may be variations in expense ratios, such as gross expense ratio or net expense ratio and after reimbursement expense rate.
Formula for the Expense Ratio
ER=Total Fund Assets/Total Fund Costs
The Expense Ratio: What Can It Tell You?
The operating expenses of a fund vary depending on the stock, but they remain stable. A fund that has low expenses will usually have lower expenses. Operating expenses are dominated by the fees paid to an advisor or investment manager.
Other expenses include recordkeeping, custodial and legal services, taxes, legal fees, accounting and auditing charges, as well as recordkeeping and custodial costs. The fund charges expenses which are included in its daily net assets value (NAV) and are not a separate charge to shareholders.
There are many ways to modify expense ratios. While the expense ratio is usually concerned with total expenses and not gross expenses, it can be used to help people understand net expenses.
Components of an Expense Rate
While most expenses within a fund can be variable, fixed expenses are common. A fee that consumes 0.5% of a fund’s assets, for example, will always consume 0.5% regardless of how it changes.
Some funds also have an advertising and promotion expense, known as a 12b-1 fee. This is added to operating expenses. According to FINRA rules, 12b-1 fees in a fund can not exceed 1% (0.75 percent allocated for distribution and 0.25 percent allocated to shareholder servicing).
The expense ratio calculation does not include trading activity by a fund, which is the buying and selling portfolio securities. Operating expenses do not include loads, contingent deferred sale charges (CDSC), or redemption fees. These costs, if applicable are paid by fund investors.
Index Funds vs. Actively Managed Funds vs. Index Funds
An index fund’s expense ratio and that of an actively managed fund can often be very different. Passively managed funds such as index funds typically have very low expense ratios. These funds have managers who are usually replicating an index. Because these funds are not managed actively, the management fees associated with them are lower than those of the funds they mirror.
Actively managed funds have teams of analysts who examine potential investments and look at companies. These additional costs are passed onto shareholders through higher expense ratios.
Vanguard S&P 500 ETF is an index fund that replicates Standard & Poor’s (S&P 500 Index) 500 Index. Investors pay just $3 per $10,000. Fidelity Contrafund has the highest expense ratio in the market at 0.86% or $86 per 10,000. 3
Examples of expense ratios
In general, passively-managed funds (such as index funds) will have lower expense ratios that actively managed funds. Here are two examples, one of each.
The AB Large Cap Growth Fund
The AB Large Cap Growth Fund has an active management fund that has a net expense ratio (0.61%) The current fee waiver and expense reimbursement for the fund is 0.01%. The fund charges 0.50% management fees. The fund invests in large-cap U.S. stock with high growth potential. The fund typically has 50 to 70 holdings.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Equity Index 500 Fund, a passive fund, is available. It aims to replicate the S&P 500 Index by investing its majority in all stocks within the S&P 500. It has a gross and net expense ratio of 0.19%. It charges a management fee at 0.06%.
The difference between the Management Fees and the Expense Ratio
Management fees are charged by mutual funds to cover operating costs. These include the hiring and retention of investment advisors to manage the funds’ investment portfolios, as well as any other management fees that are not included in other expenses. Commonly, management fees are referred to by the term maintenance fees.
Operating fees for mutual funds include the cost of buying and selling securities, as well as the costs of paying the investment team to make the sell/buy decisions. Other operating fees include marketing and legal, auditing, customer support, filing costs, and any other administrative costs.
These fees do not directly impact investment decisions but are necessary to ensure that the mutual fund operates within the Securities and Exchange Commission (SECs) requirements.
In general, ETFs (ETFs), have lower expense ratios that mutual funds.
All expenses directly related to managing investments, such as the hiring of a portfolio manager or investment team, are included in the management fee. Management fees include the most significant component, which can be anywhere from 0.5% to 1% of the fund’s assets under management (or AUM).
This percentage may seem small but it is in millions of dollars for a mutual funds with $1 billion AUM. Highly skilled investment advisors may charge fees that can push a fund’s overall expense ratio very high depending on their reputation.
The management fee does not include the cost of purchasing or selling securities for the fund. These are transaction costs, and are shown in the prospectus as the trading expense ratio. The expense ratio is made up of management fees and operating fees.
FAQs on Expense Ratio
What does the Expense Ratio mean?
The expense ratio is the percentage of assets used for administrative and other expenses. An expense ratio decreases the assets of a fund and reduces the return investors receive.
What is an example of an expense ratio?
The T. Rowe Price Equity Index 500 Fund’s 0.21% expense ratio is an example. This means that 0.2% of the fund’s assets are used to pay administrative and operational costs. Investor returns will be reduced by this amount.
What is the importance of the expense ratio?
An expense ratio is vital because it allows investors to see how much they’re paying in costs when investing in a fund. It also shows how much their return will be. An investor receiving higher returns on invested capital will have a lower expense ratio.
How is the Expense Ratio calculated?
The expense ratio can be calculated by subtracting total fund costs from total assets.
What is a good expense ratio for a mutual fund?
Funds that invest in large companies shouldn’t have more than 1% expense ratio, while smaller funds should have a ratio of 1.25%. Funds with higher expense ratios can be seen as either expensive funds or funds offering a unique service that justifies their high price.