Understanding Expense Ratios in Mutual Funds

Wed, 18 Feb 2026 11:20:00 +0000

An expense ratio—technically designated as the Total Expense Ratio (TER)—is the annual percentage fee that an Asset Management Company (AMC) deducts daily from a mutual fund’s assets to cover the operational, managerial, administrative, and distribution costs of running the scheme. Expressed as an annualized percentage of the fund’s daily net assets, this fee is deducted automatically before the scheme’s Net Asset Value (NAV) is published at the end of each business day.

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Understanding Expense Ratios in Mutual Funds