By MJF Team
TER stands for Total Expense Ratio
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.
All office expenses and the fund manager's salary are also included in TER.
You should also know that TER is included in the process of buying and selling your units.
The TER of any AMC can range between 105% to 2.25%, depending on the AUM of the mutual fund.
Total Expense Ratio = (Total expenses incurred / Total fund assets) x 100
Yes, Fund Houses deduct TER daily, NAV is declared daily based on TER.
Choose mutual funds that have lower TER, TER is directly proportional to returns. Since TER is low the returns are high.