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Expense Ratio

The expense ratio is the percentage of a fund’s assets deducted each year to cover management fees and costs. It is taken from the fund automatically, so investors see only the returns after expenses.

Why It Matters

Over decades, a 1% difference in fees can cost lakhs of rupees.

In India

Index funds often charge well under 0.3% a year, while some actively managed funds charge 1.5% or more.

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