Be watchful of expense ratio you pay if your fund manager can't outperform

Coughing up a high expense ratio year after year makes no sense if your fund manager is unable to outperform

A recent Morningstar report had some good and some bad news on expense ratios in the Indian mutual fund industry. The good news is that India’s grade on fee and expenses has improved from ‘below average’ in 2017 to ‘average’ in the latest report.

This happened due to the regulator introducing new expense ratio slabs in September 2018. The bad news is that with an asset-weighted median expense ratio of 1.93 per cent, equity funds in India are the fourth-most expensive. Clearly, investors need to be watchful of the expense ratio they pay to fund houses.  

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