What does Expense ratio work ?

The expense ratio is the annual fund operating costs of a scheme as a percentage the fund's daily net assets. Administration, management, and advertising expenses are all examples of operating expenses. A fund's expense ratio of 1% per year means that 1% of its total assets will be used each year to cover expenses. The offer document contains information about the expense ratios that might be applicable to a particular scheme. The expense ratio in India is currently fungible. This means that there is no limit to any type of expense, as long as it is within the prescribed limit. Refer to regulation 52 of 1996 SEBI (Mutual Funds Regulations) Regulations for more information about the expense ratio.