Quantum Mutual Fund today said it plans to bring down its total expense ratio (TER) to as low as .09 per cent for certain offerings in future.
For mutual fund industry, total expense ratio is the measure of total cost of a fund to investors.
The private fund house currently manages assets worth Rs 984 crore and has nine offerings, most of them equity schemes.
"We want to be transparent to our investors and want to tell them as and when AUM increases. When cost to investors comes down, it will translate into better returns for them," Quantum Mutual Fund chief executive Jimmy Patel told PTI.
When the company launched Long Term Equity Fund in 2006, it carried an expense ratio of 2.25 per cent (gross of tax). As the scheme has grown over the years, TER has been brought down to 1.25 per cent (gross of tax, 1.09 per cent net of tax) now, a company statement said.
The company has said as the AUM of the Long Term Equity Fund hits certain future thresholds, it will lower fees accordingly.
As per the statement, it will lower its expense ratio to 1 per cent for Long Term Equity Fund when its asset under management increases to Rs 4,000 crore, to .95 per cent when its AUM goes up to Rs 6,000 crore and to .90 per cent in case its AUM goes up to Rs 8,000 crore.
Again, the company plans to cut its expense ratio to .85 per cent in case its AUM crosses Rs 10,000 crore and to .75 per cent when its goes beyond Rs 10,000 crore.
Similarly, the company has said it will to bring down the expense ratio to as low as .09 per cent in case of Liquid Fund, to .39 per cent in case of Dynamic Bond Fund and .43 per cent in case of Gold Fund.
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