![]() About 2%-3% is charged on the total investment. This can directly impact the mutual fund returns.Įxit Load Exit load is the amount paid by the investor in case they decide to exit the mutual fund. Depending on the mutual fund, different entry loads are charged. It includes spreading information and awareness about a particular mutual fund.Įntry Load: Entry load is the amount to be paid by the investor at the time of joining a mutual fund. It is the amount spent towards the promotion of a mutual fund. On the other hand, if the investor opts for a direct mutual fund, where the buy-sell transaction is not actively overseen by a broker, no brokerage fee will be charged.ġ2B-1 Fee: The 12B-1 fee is another component of the expense ratio. This is an add-on fee to the expense ratio. The AMC will hire brokers to manage, buy and sell shares. In most cases, the annual management fee is 0.50% to 1.0% of funds’ assets.īrokerage Fee: The brokerage fee is charged by the Asset Management Company (AMC) if the investor opts for regular mutual funds. The said fee is paid to compensate portfolio managers. Management Fee: Generally, fund houses appoint fund managers to manage their mutual fund schemes. Typically, it includes the cost of information emails, customer support, and communications. The costs included under the expense ratio in a mutual fund are as follows:Īdministrative Cost: Fund managers incur this cost to run a fund. Most fund houses recover those costs from their investors on a daily basis. In general, the mutual fund expense ratio is inclusive of numerous crucial charges to operate a mutual fund scheme. What are the Components of Expense Ratio? Significance of Expense Ratio in Mutual Funds.Impact of Mutual Fund Expense Ratio on Returns.Expense Ratio Limit by SEBI for Different Schemes.What are the Components of Expense Ratio?. ![]()
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