Investors should use expense ratio as elimination criterion, say experts

Eliminate all those funds from your selection universe where the expense ratio is extremely high

Expense ratios of direct plans of several funds have increased in recent months. In the case of DSP Equity Fund, for instance, the expense ratio has risen from 58 basis points to 1.10 per cent. Other funds like Nippon India Multi-Cap Fund, Nippon India Focused Equity Fund and ICICI Prudential Pharma Healthcare and Diagnostic Fund have also seen increases of 44-57 basis points. Several other funds from fund houses like Franklin Templeton, Axis and SBI have seen smaller increases of 7-14 basis points.

An increase in expense ratio impacts the net return that the investor receives unless the fund manager