What Affects Expense Ratio In Debt Mutual Funds?

Subscribe to GoodReturns
For Quick Alerts
Subscribe Now  
For Quick Alerts
ALLOW NOTIFICATIONS  
For Daily Alerts

     Expense ratio deducted on a daily basis as charges towards different administrative, distribution, management and other heads is applicable on products including ULIPs, mutual funds, NPS etc. And after factoring in these charges, net asset value or NAV for a scheme is published.

    What Affects Expense Ratio In Debt Mutual Funds?

    The deduction in respect of the same is meager when one day time is considered nonetheless it affects returns for an investor considerably when long term outlook of say 5-10 years is taken into view.

     Debt Mutual Funds unlike equity mutual funds have seen lower expense ratio as in the scenario when the rates are declining, the funds in the category are either waiving off such charges or are reducing them. This is done mainly to ensure that return to investors in net remain positive.

     Also, the fund's net assets have a bearing on expense ratio and these share inverse relationships which means if assets of a fund house increase the expense ratio which is just the smaller percentage of net assets decrease in the same proportion.

     In complete, lower expense ratio helps attain the targeted financial goal much earlier taking the return parameter as constant year on year.

     Goodreturns.in

    --

    Story first published: Tuesday, October 24, 2017, 16:06 [IST]
    Company Search
    Enter the first few characters of the company's name or the NSE symbol or BSE code and click 'Go'

    Find IFSC

    Get Latest News alerts from Goodreturns

    We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Goodreturns sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Goodreturns website. However, you can change your cookie settings at any time. Learn more