The core idea
Operating expenses are deducted within the fund. A 0.20% ratio is about $2 per year per $1,000 if value stays constant.
A little more context
The ask is what sellers request; the bid is what buyers offer. Crossing that gap creates an implicit trading cost.
What to remember
Fund expenses, spreads, taxes, and possible account fees may still apply. Compare the whole cost picture.
Pause and reflect: how would you explain this idea to someone who has never invested?