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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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