Investing Basics
Beginner
Expense Ratio
💡 In plain English: The annual fee a mutual fund charges to manage your money — lower is almost always better.
Definition
The annual cost of owning a mutual fund or ETF, expressed as a percentage of the fund's assets, deducted automatically.
📌 Real-World Example
A fund with ₹10,000 invested at 1.5% expense ratio costs ₹150/year in fees. Over 20 years at 12% returns, 1.5% fee costs you ₹2.3L more than a 0.1% index fund.
🔢 Formula
Expense Ratio = Total Fund Costs / Total Fund Assets × 100
Try it yourself
Use the SIP Calculator to see this concept with your own numbers.
Related Terms
Index Fund
A fund that simply copies a market index like Nifty 50 — no fund...
ETF (Exchange-Traded Fund)
Like an index fund but traded on the stock exchange during market...
Mutual Fund
A pool of money from many investors managed by a professional fund...
NAV (Net Asset Value)
The price per unit of a mutual fund — calculated daily after market close.
⚠️ Educational Content: All definitions and examples on this page are for educational and consultancy reference purposes only. They do not constitute financial, legal, or investment advice. Moneykar is not registered with SEBI, CBUAE, SCA, or any financial regulator. Consult a qualified professional before making financial decisions.