Mutual Fund Investment Tips: The expense ratio of a mutual fund determines whether you will find it cheaper or expensive to invest in that scheme.
Mutual Fund Investment Tips: Before investing in mutual funds, usually an investor first sees the performance of this fund. But if you are thinking of investing in mutual funds, then not only the performance of the fund so far, Rather, look at its Expense Ratio, that is, the cost of investment as well. In fact, the fund’s expense ratio determines whether investing in that scheme will make you cheaper or more expensive. The increase or decrease of the expense ratio also directly affects your returns.
Spend on managing your investment
The expense ratio that is incurred on the management of mutual funds is called the expense ratio. There are various expenses of fund houses to manage the fund. The fund house has a team of professionals who keep an eye on the market. It also includes transfer and registrar-related expenses Are included. The expense ratio is an annual fee. It shows the cost incurred per unit. The expense ratio is an annual fee charged by the fund house. Therefore, look at the expense ratio at the time of investing in the fund.
The actual return is determined by the expense ratio
It can be understood that you have chosen a mutual fund scheme for investment, whose expense ratio is 1.5 percent. At the same time, you have invested 1 lakh rupees in it. This means that for managing this fund, you will have to pay 1500 rupees annually. In the same way, if this fund gave a total return of 12 percent, then you will get a 10 percent return actually.