It refers to the fees that mutual fund firms charge to manage your portfolios.
Fees for portfolio managers, marketing, and other expenses are included.
If a mutual fund’s exit load is 1% each year, for example, it implies the mutual fund will take 1% of your entire invested amount as fees for managing your money.
Every day, your expenditure ratio is computed and subtracted from your overall investment.
The returns you see have already been adjusted for the expense ratio.
The expense ratio would not need to be paid separately.
When it comes to expense ratios, there is one thing you should keep in mind.
Even though they are essentially the same mutual fund, two versions of the same mutual fund might have different expense ratios.
A regular plan mutual fund has a greater expense ratio than a direct plan mutual fund, which has a lower expense ratio.
Investigate why the expense ratios of the same fund are different in regular and direct funds.
When you are investing in Mutual funds, make sure you are investing in Direct mutual funds, it can save you 1%. Almost, all brokers provide the flexibility to invest in Direct mutual funds such as Groww, , , 5 Paisa etc.
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