<prompt> Human: Forgive me, but Im trying to learn. If you have two funds, fund A and fund B, and fund A has an ER of 0.5 and an annualized average return of 7 for the life of the fund, and fund B has an ER of 1.5 and an annualized average return of 10, wont fund B give you a return thats 2 higher than fund A?Is the thing to look out for that the ERs are fixed and the annual return is not? Is that why low ER funds are better?Assistant: An expense ratio of 1 is an instant loss of return. You start the investing year at -1 and have to dig out from there. So in the same asset class it is a simple choice, lowest ER is best.Human: So, even if the funds have the same asset class, its better to chose a fund with an annualized return thats lower if the expense ratio is lower? I guess what Im not understanding is the math of it.  <response>: When youre looking at a funds annualized return, youre looking at how it has performed in the past. And as they say, past performance is no guarantee of future returns. If youre comparing apples to apples the same fund types, especially index funds that are indexing to the same thing and the - differences are going to be minuscule, then picking the fund with the lower ER is a no brainer. 