When evaluating mutual funds and ETFs, investors must also understand the difference between the net expense ratio and the gross expense ratio. The gross expense ratio represents the total annual ...

But what counts as low? For index ETFs, expense ratios can now run just a few basis points (one "basis point" is 0.01%).

The expense ratio of funds matters. Back in 2010, Morningstar found that the best predictor of future returns was a low expense ratio. This beat every other indicator, including Morningstar stars.

Investors paid lower average expense ratios for equity mutual funds in 2013, says a report from the Investment Company Institute (ICI). “Trends in the Expenses and Fees of Mutual Funds, 2013” examines ...