How to read what a fund costs
Two numbers matter: what the managers charge, and the total including interest on money the fund borrowed. Here is how to compare them.
The report calls the total the "expense ratio" and the borrowing "leverage".
Fees and the total
The management fee is what the firm running the fund charges each year, as a share of the holdings. The total cost adds everything else the fund pays - and for a fund that borrows, the interest on the borrowed money is usually the biggest piece. A fund can charge 1% in fees and cost 3% in total.
Why borrowing changes the picture
Borrowed money buys more holdings, so it earns more income when things go well and loses more when they do not. The interest is a real cost you pay every year regardless. Two funds with the same fee can differ a lot in total cost simply because one borrows and the other does not.
Compare like with like
A fund that invests in tax-free municipal bonds cannot be compared on cost with one that invests in companies around the world. Our fund pages compare each fund with funds of the same kind only, and say how many of them charge less. The middle values by kind are below.
The fund's own example
Every yearly report carries a worked example: what $1,000 invested would cost over one, three, five and ten years at the fund's current charges. Where the fund filed that table in a form we can read, its page shows the ten-year figure.
What the middle fund costs, by kind of fund
- 87 funds that invest in bonds
the middle fund charges 1.1% a year in fees and 3.2% in total, including interest on borrowed money. - 72 funds that invest in tax-free municipal bonds
the middle fund charges 0.6% a year in fees and 3% in total, including interest on borrowed money. - 50 funds that invest in shares
the middle fund charges 1% a year in fees and 1.3% in total, including interest on borrowed money. - 19 funds that invest in high-yield bonds
the middle fund charges 1% a year in fees and 2.5% in total, including interest on borrowed money. - 14 funds that invest in preferred shares
the middle fund charges 1% a year in fees and 4.3% in total, including interest on borrowed money. - 13 funds that invest in outside the U.S.
the middle fund charges 0.9% a year in fees and 1.4% in total, including interest on borrowed money.
Middle values from each fund's latest yearly report to the U.S. Securities and Exchange Commission; the count is the funds of that kind that report both figures. Each line opens the list. Checked Sept 18, 2026.
Check your own fund
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All funds sorted by yearly cost