Fund costs (TER)
The percentage a fund keeps from your money every year, whatever the result.
What does an investment fund cost?
The TER (total expense ratio) is a fund's total yearly cost, as a percentage of the money invested. A TER of 1% means that out of every 1,000 lei invested, the fund keeps 10 lei a year for management, custody and other expenses.
1% a year sounds small. But costs compound just as returns do. At 1,000 lei a month for 30 years, with a hypothetical return of 5% a year above inflation, a 1% yearly cost shrinks the final sum by 17%. At 2%, by 30%.
The TER is not everything. On top come broker fees, any currency-exchange fee and, for some funds, entry and exit charges.
Cost is the one thing about an investment you know for certain in advance. The return you do not.
1,000 lei a month, 30 years, 5% a year: 818,698 lei with no costs, 681,621 lei with a 1% yearly cost.
What does TER mean?
Total expense ratio: a fund's total yearly cost as a percentage of the money invested. It comes out of the fund's value automatically, not as a separate bill.
How much does 1% a year matter?
Over 30 years, at 1,000 lei a month and a hypothetical 5% real return, a 1% yearly cost takes 17% of the final sum.
Related terms
Sources
- Robert J. Shiller, monthly US stock market data (ie_data.xls), accessed 27 September 2026 · shillerdata.com
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