The expense ratio of mutual fund

One handy way to measure the relative cost of investing in a particular fund is by looking at its expense ratio. This figure, which appears in the fee table section of the fund’s prospectus , is the amount that each investor can expect to pay for fund expenses each year, stated as a percentage of the money invested.
The expense ratio includes administrative costs and management fees but not sales charges (loads) or 12b-1 fees, which I explain in the following sections. Thus, the expense ratio provides you with a useful, though partial, picture of the costs involved in investing in a fund.
The average stock fund has an expense ratio of about 1.4%; for bond funds, the average is under 1.0%. A ratio higher than this may or may not be justifiable, depending on the kind of fund you are considering.