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REDDIT

When comparing ETFs, can a high expense ratio be overlooked if the growth in one ETF is greater than the expense ratio difference between the two?

H
Apr 24, 2025 · 13:04

When comparing two ETFs, how important is expense ratio if the difference between the two ETFs is greater than the difference in expense ratios? I’ll try to provide a simple example below.

ETF1: E/R=.05% | 1yr return: 2% | 3yr:4%
ETF2: E/R=.01% | 1yr return: 1% | 3yr:2%

ETF1 made a greater profit than the .04 difference. Am I correct in assuming that in the long run ETF1 would return more than ETF2?

If you want the specific stocks I’m comparing, it’s between RERGX & VEMIX.