Expense ratio represents the annual fund operating expenses of a scheme, expressed as a percentage of the fund‟s daily net assets. Operating expenses of a scheme are administration, management, advertising related expenses, etc.
An expense ratio of 1% per annum means that each year 1% of the fund‟s total assets will be used to cover expenses. Information on expense ratio that may be applicable to a scheme is mentioned in the offer document. The expense ratio for a scheme is disclosed on the respective AMC’s website every month as part of the factsheet.