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Mutual funds
Also called: TER, Total expense ratio, Expense ratio
The expense ratio, or total expense ratio (TER), is the yearly fee a mutual fund charges, as a percentage of the money it manages. It is taken out of the fund a little each day, so the published NAV is already net of it.
With ₹1 lakh in a fund whose TER is 1%, the fund deducts about ₹1,000 over a year from your holding's value — about ₹2.7 a day, inside the NAV. The Direct plan of the same scheme has a lower TER than the Regular plan because no distributor commission is paid.
The expense ratio, or total expense ratio (TER), is the yearly fee a mutual fund charges, as a percentage of the money it manages. It is taken out of the fund a little each day, so the published NAV is already net of it.
With ₹1 lakh in a fund whose TER is 1%, the fund deducts about ₹1,000 over a year from your holding's value — about ₹2.7 a day, inside the NAV. The Direct plan of the same scheme has a lower TER than the Regular plan because no distributor commission is paid.
No. Expense ratio describes a fund's costs, structure or past record. Mutual fund investments are subject to market risks, and past performance does not indicate future returns.