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Expense Ratio of Index Funds

As per SEBI regulations, index funds can charge a maximum of 1.50 per cent as expense ratio. Find out more

If I remember correctly, SEBI had set a 0.50% expense ratio limit for Index / Exchange Traded Funds. However, I find that many of these funds are charging over a percentage in expense ratio. Why is it so?
- Ravi Parikh

As per SEBI Regulation 52, index funds can charge a maximum of 1.50% of daily net assets as expense ratio. In addition to the limit specified above, the following costs or expenses may be charged to the scheme-

  1. Additional expenses under regulation 52 (6A) (c) to the extent of 0.20%
  2. Expenses not exceeding of 0.30% of daily net assets, if inflows from other than top 15 cities are at least -
    1. 30% of gross new inflows in the scheme, or;
    2. 15% of the average assets under management (year to date) of the scheme,
    whichever is higher.

On basis of these regulations, all index funds adhere to the maximum limit set by SEBI.



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