Expense ratio of a mutual fund: All you need to know

Expense ratio is the fee you need to pay mutual fund companies to manage your money. Just like you pay a lawyer to manage your legal matters, a chartered accountant to help you file your tax returns and an architect to build your house, mutual fund managers charge a fee for building and managing your investment. In the world of mutual funds, this fee is known as 'expense ratio'. Expense ratio includes all the charges that you need to pay a fund house. These charges include: Fund management fees Agent commission Selling and promotional expenses, among others Should you care about expense ratios? An expense ratio of even 1.5 per cent can significantly eat into your returns in the long run. Here's how:

This article was originally published on May 24, 2022, and last updated on October 13, 2022.