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ever wondered what costs come with investing in mutual funds letamp;#39;s talk about the total expense ratio or teer te is a measure of the total costs associated with managing and operating a mutual fund it includes management fees administrative fees and other operational expenses think of te as a slice of your investment thatamp;#39;s taken annually to cover these costs itamp;#39;s expressed as a percentage of the funds average net assets why is TE important important a higher teer means higher costs which can eat into your returns over time lower te funds are more cost effective and can potentially give you better net returns why is TE important a higher te means higher costs which can eat into your returns over time lower te funds are more coste effective and can potentially give you better net returns remember while te is crucial itamp;#39;s also important to consider the funds perform