Mutual Fund Costs

An expense ratio is the annual operating cost of a mutual fund scheme, expressed as a percentage of its assets. It is reflected in the scheme's NAV rather than billed separately to you, so the returns shown by the fund are normally after these expenses.

Exit load is checked separately for each SIP instalment because every instalment buys units on its own allotment date. The percentage and holding period depend on the mutual fund scheme's applicable terms.

Direct and regular plans invest in the same mutual fund portfolio, but a direct plan has a lower expense ratio because it excludes distributor commission. The right fit depends on whether you can choose and manage funds yourself or value ongoing distributor support.