The weighted average expense ratio of your portfolio is an important number to know. Most people know that expenses have a huge impact on your portfolio over time since they are a drag on investment returns.
If your portfolio returns 11% during a particular year before adjusting for expenses, and your portfolio has a weighted expense ratio of 1%, your portfolio returns after adjusting for expenses will be 10%.
Lets assume you have a portfolio of $10,000 invested in the following Fidelity index funds:
| Fund | Ticker | Balance |
| Fidelity S&P 500 Index Fund | FXAIX | $ 5,000.00 |
| Fidelity Large Cap Value Enhanced Index | FLVEX | $ 2,500.00 |
| Fidelity Large Cap Growth Index | FSPGX | $ 2,500.00 |
The expense ratios associated with each of the funds are as follows:
| Fund | Exp Ratio |
| Fidelity S&P 500 Index Fund | 0.015% |
| Fidelity Large Cap Value Enhanced Index | 0.390% |
| Fidelity Large Cap Growth Index | 0.035% |
Adding the expense ratios together and dividing by three would yield an arithmetic average of 0.147%; however, that is not the actual average of the portfolio itself since there are different dollar amounts in each fund.
In order to calculate the weighted average, we need to multiply the dollar amount in each fund by that specific fund’s expense ratio:
| Fund | Balance | Exp Ratio | Dollar Exp |
| Fidelity S&P 500 Index Fund | $ 5,000.00 | 0.015% | $ 0.75 |
| Fidelity Large Cap Value Enhanced Index | $ 2,500.00 | 0.390% | $ 9.75 |
| Fidelity Large Cap Growth Index | $ 2,500.00 | 0.035% | $ 0.88 |
| TOTALS | $ 10,000.00 | $ 11.38 |
Based on the table above, the Fidelity Large Cap Value Enhanced Index contributes $9.75 in total portfolio expenses on a weighted basis. This amount is calculated by multiplying $2,500 by the expense ratio of 0.39%.
Calculating the dollar contribution of expenses for every fund in the portfolio and summing them together gives you a total dollar expense of $11.38 on a weighted basis. This total dollar expense is divided by the total portfolio value of $10,000 to calculate the weighted average of 0.1138% which is less than the arithmetic average of 0.147%.
| Fund | Balance | Exp Ratio | Dollar Exp | Weighted Avg |
| Fidelity S&P 500 Index Fund | $ 5,000.00 | 0.015% | $ 0.75 | |
| Fidelity Large Cap Value Enhanced Index | $ 2,500.00 | 0.390% | $ 9.75 | |
| Fidelity Large Cap Growth Index | $ 2,500.00 | 0.035% | $ 0.88 | |
| TOTALS | $ 10,000.00 | $ 11.38 | 0.1138% |
In this hypothetical scenario, the weighted average is actually lower than the arithmetic average; however, that may not always be the case. Depending on the expense ratios and dollar allocations in your portfolio, it is possible that the weighted average could be higher than the arithmetic average.
If you have a portfolio that includes both active and passive management, calculating the weighted average expense ratio will provide you with a clearer understanding of the impact investment costs may have on the future value of your portfolio over longer periods of time.
The Excel model used to calculate the weighted average can be found here.
Here, you can find a great variety of online slots from leading developers.
Users can try out traditional machines as well as modern video slots with high-quality visuals and bonus rounds.
Whether you’re a beginner or a casino enthusiast, there’s a game that fits your style.
casino
All slot machines are available 24/7 and optimized for desktop computers and mobile devices alike.
No download is required, so you can start playing instantly.
Site navigation is user-friendly, making it simple to find your favorite slot.
Join the fun, and enjoy the excitement of spinning reels!
This website, you can find lots of online slots from famous studios.
Players can try out traditional machines as well as modern video slots with vivid animation and exciting features.
Even if you’re new or a seasoned gamer, there’s something for everyone.
casino slots
Each title are instantly accessible round the clock and compatible with PCs and smartphones alike.
No download is required, so you can jump into the action right away.
The interface is easy to use, making it simple to find your favorite slot.
Sign up today, and dive into the thrill of casino games!
On this platform, you can find lots of casino slots from famous studios.
Visitors can experience retro-style games as well as new-generation slots with vivid animation and interactive gameplay.
If you’re just starting out or an experienced player, there’s always a slot to match your mood.
play aviator
Each title are available 24/7 and compatible with desktop computers and mobile devices alike.
You don’t need to install anything, so you can start playing instantly.
The interface is intuitive, making it convenient to explore new games.
Sign up today, and discover the excitement of spinning reels!
This website, you can find lots of casino slots from top providers.
Visitors can enjoy retro-style games as well as feature-packed games with stunning graphics and bonus rounds.
If you’re just starting out or a seasoned gamer, there’s a game that fits your style.
money casino
All slot machines are instantly accessible anytime and compatible with PCs and smartphones alike.
No download is required, so you can start playing instantly.
Platform layout is easy to use, making it quick to find your favorite slot.
Register now, and discover the thrill of casino games!
This website, you can access lots of casino slots from famous studios.
Visitors can try out retro-style games as well as new-generation slots with high-quality visuals and bonus rounds.
If you’re just starting out or an experienced player, there’s something for everyone.
play casino
All slot machines are instantly accessible anytime and designed for PCs and smartphones alike.
All games run in your browser, so you can get started without hassle.
The interface is easy to use, making it quick to find your favorite slot.
Register now, and discover the thrill of casino games!
On this platform, you can find a great variety of online slots from leading developers.
Visitors can try out retro-style games as well as new-generation slots with stunning graphics and interactive gameplay.
If you’re just starting out or a seasoned gamer, there’s something for everyone.
slot casino
The games are available 24/7 and optimized for desktop computers and smartphones alike.
No download is required, so you can jump into the action right away.
Platform layout is user-friendly, making it simple to browse the collection.
Register now, and enjoy the thrill of casino games!
Here, you can find a great variety of online slots from leading developers.
Visitors can experience traditional machines as well as new-generation slots with high-quality visuals and bonus rounds.
Whether you’re a beginner or a seasoned gamer, there’s a game that fits your style.
casino slots
All slot machines are instantly accessible round the clock and compatible with PCs and mobile devices alike.
No download is required, so you can start playing instantly.
Platform layout is intuitive, making it convenient to explore new games.
Join the fun, and enjoy the world of online slots!