Tips for choosing funds

Look for low costs

If you’re choosing funds on your own, remember that costs have a substantial impact on long-term net returns. Fund costs are subtracted, dollar for dollar, from investment returns. To find out what a fund costs to own, look up its expense ratio.* The lower the expense ratio, the less it costs to own the fund.

Consider an index fund

An index fund aims to track the performance of a certain index such as the Standard & Poor’s 500 Index. Index funds generally have lower expense ratios than actively managed funds because they don’t employ costly fund managers or analysts.

Whenever you invest, there's a chance you could lose the money.

*The expense ratio is what you pay each year to cover the cost of running the fund. To calculate it, fund operating costs are divided by the total amount of money in the fund. The expense ratio is deducted from the fund’s return. You can find it in the current prospectus. With some funds, you may pay additional charges.