Does expense ratio impact my returns in a mutual fund?
Samar Sharma, Bangalore
The expense ratio is a recurring expense and can change even after you sign up for a scheme. For information on the current expense ratio, you can check the monthly fact sheet of the fund or check on www.valueresearchonline.com, which is regularly updated. SEBI (the Securities & Exchange Board of India) stipulates the maximum expense ratios that schemes can charge. Moreover, all mutual fund returns are calculated on the NAV after accounting for the expense ratio. Expenses are deducted from your fund on a daily basis before calculating the NAV. Three, the capital gains you make are also after already adjusting expenses. The returns you see on the NAV are the returns you realise as an investor.