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How does an ETF's expense ratio get charged to me if I never see a bill?

Answer

You never pay a fund's expense ratio as a separate charge or invoice. Instead, the fund deducts it gradually from its own assets, which slightly reduces the fund's daily net asset value. So the cost is baked invisibly into your returns: if a fund's underlying holdings return 8% and the expense ratio is 0.10%, you effectively earn about 7.9%. This is exactly why low fees matter so much, because you feel their drag without ever noticing a line item. It also means you can't avoid the fee by holding the fund a certain way; it's always working against your returns. When comparing funds, the expense ratio is the single most reliable, upfront number for what you'll pay, so weight it heavily in your choice.

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