The total expense ratio (TER) is an indicator that expresses the total costs associated with the management and operation of an investment fund, as a percentage of its average annual assets. It includes management fees, administrative costs, distribution fees, and other operating expenses. TER helps investors understand how much they will pay for holding a share in the fund and affects the net return on the investment. A lower TER indicates a more efficient fund, while a higher TER may reduce the overall return for the investor.