Fees & Charges for Investing in Mutual Funds in India

What are Mutual Fund Charges?

What are the Charges Associated With Mutual Funds?

How to Calculate Expense Ratio?

SEBI Guidelines for Mutual Fund Charges

Follow the table given below to get a clear idea about SEBI guidelines for mutual fund charges:

Average Net Assets Per Week Limit for Equity Scheme Limit for Debt Scheme Equity Traded Funds (ETFs) including Gold ETFs / Index Funds Fund of Funds (FoF) (Both Domestic and Foreign)
Up to ₹100 Cr 2.50% 2.25% 1.50% Maximum of 2.5%, including the TER of underlying schemes.
₹100 to ₹300 Cr 2.25% 2%
₹300 to ₹600 Cr 2% 1.75%
On the balance assets 1.75% 1.50%

Note: SEBI has set a TER limit on equity and debt funds.

The cost of investment can affect the total return. Hence, investors must learn about different types of mutual fund charges while selecting a mutual fund scheme.

FAQs about Mutual Fund Charges

Does a regular plan of a mutual fund scheme have a higher expense ratio?

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Yes, a regular plan of a mutual fund scheme has a higher expense ratio than a direct plan because investors have to pay a commission to the intermediary, i.e., broker, distributor, or agent. This amount is deducted from the investor’s investment amount.

Is there any entry load on mutual fund investment?

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Currently, there is no entry load on mutual fund investment. Previously, this charge was set at 2.25% of the total investment value. However, since August 2009, SEBI no longer charges an entry load for a mutual fund.

What are the charges associated with mutual funds?

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The expense ratio, exit load, and transaction charges are the charges associated with mutual funds.

What is the expense ratio in mutual funds?

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The expense ratio represents the annual cost of a mutual fund, expressed as a percentage of the fund's average net assets. It includes all the fees and expenses associated with managing and operating the fund.

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