What is a fair expense ratio for an index fund?
Anything 0.50% a year or below for a US index fund or 0.75% or below for an International fund. Some companies offer S&P or Total Stock Market funds with outrageously high expense ratios of 1% or more. Do not use these funds unless you have no other choice available. If the index fund is charging more than 0.50% a year then you are being charged too much and need to find another option if you can. Some international index funds charge slightly more because of the added expense of trading on foreign stock exchanges. Therefore, international stock index funds are more expensive but should not exceed 0.75% in expense ratio. If your only choice is an expensive index fund or an expensive actively managed fund then choose the expensive index fund. The best choice though is a cheap index fund.
