Expert explains why you should avoid unnecessary churning of funds

With new expense ratio slabs coming into force, do not shift from a bigger to a smaller fund without good reason

The Securities and Exchange Board of India (Sebi) had in September 2018 announced new total expense ratio (TER) slabs. These new rates were implemented from April 1, 2019. While retail investors will benefit from cost reduction, they should watch out for unwarranted  churning 

by agents.   

Passing on benefits of scale: The old TER slabs were introduced in 1996. Since then there has been a humongous increase in the industry’s assets under management (AUM). Between February 2014 and February 2019, industry AUM has grown from Rs 9.20 lakh crore to 24.30 lakh crore , a compounded annual growth of 21.44 per