What is Expense Ratio?
- In simple terms, expense ratio refers to the fee that the Mutual Fund Company charges from the investors.
- It is usually expressed as a percentage of the AU and shows how much of the fund’s assets are being used for administrative and operational purposes.
- Lower the expense ratio better it is for investors since the investors will receive profits only after paying the expense ratio.
Mathematically Expense Ratio=
(Total fund costs)/ (Total fund assets)
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