Does expense ratio affect NAV?

Yes — the expense ratio is charged daily (as 1/365th of the annual rate) and is already reflected in the NAV. When you see NAV, it's net of expenses. A 1% expense ratio means the fund earns 1% less than the gross portfolio return each year.

What is Expense Ratio? — NISM Glossary | PrepClever

The expense ratio is the total annual cost of owning a mutual fund, expressed as a percentage of average daily net assets. It includes fund management fees, trustee fees, registrar fees, audit fees, marketing costs, and other operational expenses.

SEBI caps expense ratios on a slab basis — larger funds have lower maximum expense ratios. Direct plans have lower expense ratios than regular plans by exactly the commission amount paid to distributors.

SEBI Expense Ratio Caps (2025)

First ₹500 crore AUM: 2.25% (equity), 2.00% (debt)
Next ₹250 crore: 2.00% / 1.75%
Next ₹1,250 crore: 1.75% / 1.50%
Above ₹50,000 crore: 1.05% / 0.80%

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Relevant NISM series

Series V-A

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SEBI Expense Ratio Caps (2025)

First ₹500 crore AUM: 2.25% (equity), 2.00% (debt)
Next ₹250 crore: 2.00% / 1.75%
Next ₹1,250 crore: 1.75% / 1.50%
Above ₹50,000 crore: 1.05% / 0.80%

info

Relevant NISM series

Series V-A

See Expense Ratio in exam questions

1,200+ NISM practice questions. Free to start.

Start Practice Free

What is Expense Ratio?

SEBI Expense Ratio Caps (2025)

Related Terms

NAV

Total Return

Direct Plan

Regular Plan

AUM

FAQs about Expense Ratio

Where to go from here

Master every term that matters

What is Expense Ratio?

SEBI Expense Ratio Caps (2025)

Related Terms

NAV

Total Return

Direct Plan

Regular Plan

AUM

FAQs about Expense Ratio

Where to go from here

Master every term that matters