What does the term "fund expense ratio" mean?

The term "fund expense ratio" refers specifically to the annual fee that an investment fund charges its shareholders, expressed as a percentage of the fund's average assets under management. This fee encompasses a variety of costs associated with managing the fund, such as operational expenses, management fees, and administrative costs. By expressing these expenses as a ratio, investors can easily understand how much of their investment is being consumed by costs, allowing for better comparison between different funds. A lower expense ratio generally indicates a less expensive fund, which could lead to higher net returns for investors over time, assuming performance is similar.

The other options do not accurately capture the concept of the fund expense ratio. Contributions to a fund refer to the money invested, not the costs incurred. The overall return generated by the fund focuses on performance, while the average percentage of funds invested in stocks versus bonds pertains to asset allocation rather than costs.