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Glossary term

Expense Ratio

Annual fund management fee

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Definition

What is Expense Ratio?

The expense ratio is the annual fee a mutual fund or ETF charges, expressed as a percentage of assets. A 1% expense ratio on a ₹10L portfolio means ₹10,000/year lost to fees — over 30 years this can eat 25–30% of your final balance. Index funds typically charge 0.05–0.50%; actively managed funds 0.75–2.5%.

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