What is a good TER in South Africa?

It depends on the fund. A passive index fund or ETF might charge around 0.1% to 0.5% a year, while an actively managed fund often runs 1% to 2% or more. Compare like-for-like funds, not a bond fund against an equity fund.

What is the difference between TER, TIC, and EAC?

The TER is the running cost of the fund itself. The TIC (total investment charge) adds trading costs. The EAC (effective annual cost) is the fullest measure, adding advice, platform, and exit charges, broken into components so you can compare products.

Is a higher TER ever worth paying?

Sometimes, if it buys something you value and can't get more cheaply. But fees are certain while returns are not, so a higher fee has to justify itself every year through better net results.

What is a TER (total expense ratio)?

Guide · ~5 min read · Updated July 2026

The total expense ratio (TER) is the annual cost of owning a fund, shown as a percentage of the money invested. A TER of 1.00% means roughly R1,000 a year in costs for every R100,000 invested. It's deducted from the fund, so you rarely "see" it as a separate charge.

What it includes

The fund manager's fee
Administration and custody costs
Audit, compliance, and other running costs

It usually does not include transaction costs, or any advice or platform fees you pay on top.

TER, TIC, and EAC

South African fund disclosures use three cost numbers, and it helps to know which is which:

TER: the running cost of the fund itself.
TIC (total investment charge): the TER plus the fund's trading costs.
EAC (effective annual cost): the fullest picture, an industry standard that adds advice, platform, and any early-exit charges, broken into components so you can compare one product against another on the same basis.

The TER is the right lens for comparing two funds. The EAC is the right lens for comparing your total cost of investing through one product versus another, once advice and platform are in the mix.

Why a small percentage matters so much

Fees compound against you in exactly the same way returns compound for you. Over a few years the difference looks tiny; over an investing lifetime it's large.

Here's the point in rands. Put R1,000,000 away for 30 years. If it grows at 9% a year after fees, it becomes about R13.3 million. Knock the net return down to 7% (a 2 percentage-point difference in cost), and you end with about R7.6 million. That 2% a year quietly took R5.7 million off the result. The exact figures depend on the return, but the shape holds: small fee, big number.

Active vs passive

Most of the fee gap comes down to how the fund is run. A passive fund tracks an index and charges little, often 0.1% to 0.5%. An active fund pays a team to pick investments and usually charges 1% to 2% or more. Active management can add value, but it has to beat its extra cost every year to leave you ahead, and many don't over the long run. That's why cost is the first thing to check.

Where to find it

Every unit trust and ETF publishes a minimum disclosure document (the fund fact sheet). The TER, TIC, and often the EAC are listed there, usually near the fees section. If you can't find a fund's TER, treat that as a warning sign in itself.

How to read it

Compare the TER of similar funds (like-for-like, for example two global equity funds), and weigh it against what you're getting. A higher fee isn't automatically "bad" if it buys something you value, but fees are certain while returns are not, so they deserve attention. The same fee drag applies inside tax-free savings accounts and retirement annuities, where costs compound over decades just like returns.

Common questions

What's a good TER?
Roughly 0.1% to 0.5% for a passive index fund, 1% to 2% or more for active. Compare like-for-like funds.

TER, TIC, or EAC?
TER compares funds; EAC compares your all-in cost through a product, advice and platform included.

Is a higher fee ever worth it?
Only if it reliably buys better net results, which is a high bar over the long run.

Related guides

Unit trusts vs ETFs: the two fund types those fees usually sit inside.
TFSA contribution limits: the tax-free wrapper where low fees matter most.

Educational only. You can see and compare the TER of South African funds in the app's Browse All Funds screen. For advice on fund selection, speak to a registered financial adviser.