What is TER in Mutual Fund

By MJF Team

Let's Know about TER in Mutual Fund.

TER stands for Total Expense Ratio

Understand TER

The fund manager has to spend money on investing and withdrawing funds in stock market, debt fund and money market etc. The cost of all this is covered by TER.

Understand TER

All office expenses and the fund manager's salary are also included in TER.

TER  

You should also know that TER is included in the process of buying and selling your units.

What is the maximum TER?

The TER of any AMC can range between 105% to 2.25%, depending on the AUM of the mutual fund.

How is TER deducted

Total Expense Ratio = (Total expenses incurred / Total fund assets) x 100

Is TER deducted daily?

Yes, Fund Houses deduct TER daily, NAV is declared daily based on TER.

In which fund to invest?

Choose mutual funds that have lower TER, TER is directly proportional to returns. Since TER is low the returns are high.

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