I understand that all MFs charge a fee which ranges between 2 to 3% for most equity funds. I would like to know if this is included in the returns mentioned? For example if a MF scheme mentions in its chart that it has a return of 22% in a specific period, does it mean that investor gets 22% or he gets 22% minus the management fee(expense ratio)?
- Girish Sidana
The NAV of every mutual fund is calculated after deducting management expenses of 2-3 per cent that you mention. Therefore, if a fund's returns are displayed as 22 per cent, it means that you as an investor will get 22 per cent appreciation on your investment, if you sell your units. No further deductions will be made for expenses.
This article was originally published on June 04, 2015.
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