Business Standard

High expense ratio erodes mutual funds' net return, so monitor cost

If your distributor suggests moving from a low- to a high-cost fund, question the rationale of the move

Mutual funds, MF, Mutual fund
Premium

When choosing a fund, pay attention to the expense ratio. (Photo: Shutterstock)

Sanjay Kumar Singh New Delhi
The Securities and Exchange Board of India (Sebi) has come out with a consultation paper recommends changes to the way the total expense ratio (TER) of mutual funds is calculated and charged. The paper also seeks to curb malpractices linked to expense ratios.

Investors, on their part, need to be cognizant of the role expense ratio should play in fund selection, and remain vigilant against malpractices.  

High cost affects return 

When choosing a fund, pay attention to the expense ratio that eats into the gross returns generated by the fund. According to Kaustubh Belapurkar, director-manager research at Morningstar Investment Advisor,

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: May 26 2023 | 7:15 PM IST

Explore News

To read the full story, subscribe to BS Premium now, at just Rs 249/ month.

Key stories on business-standard.com are available only to BS Premium subscribers.

Register to read more on Business-Standard.com