Mutual Fund Investment Cast: Before investing in mutual funds, the fund’s expense ratio must be seen.
Mutual Fund Investment Tips: Before investing money in a mutual fund, the investor usually looks at the earlier performance of that fund. Or if the information of the fund has to be taken, then the focus is only on its returns. But here one thing is very important that what is the cost of spending in the fund. This is decided by the Expense Ratio of the fund. The expense ratio of the fund itself determines the cost of investing in a fund. The effect of more or less the expense ratio also directly affects your returns. For this reason, experts always recommend that before choosing any fund, check the expense ratio. Here we are giving information about some such funds, in which the cost of Nivea is low, but the returns are high.
Mirae Asset Emerging Bluechip Fund
Expense Ratio: 0.74% (November 30, 2020)
5 Year Return: 18%
7 year return: 26%
Value of 1 lakh investment in 5 years: Rs 2.33 lakh
10,000 Monthly SIP Value in 5 Years: Rs 9.42 Lakh
Assets: 13,405 crore (November 30, 2020)
Risk: Less than average
SBI Smallcap Fund
Expense Ratio: 0.90% (November 30, 2020)
5 Year Return: 17.69%
7-Year Return: 28.96%
Value of 1 lakh investment in 5 years: Rs 2.25 lakh
10,000 Monthly SIP Value in 5 Years: Rs 9.52 Lakh
Assets: 6202 Crore (November 30, 2020)
Risk: Average
Axis Focused 25 Fund
Expense Ratio: 0.66% (November 30, 2020)
5 Year Return: 17.61%
7-Year Return: 18.77%
Value of 1 lakh investment in 5 years: Rs 2.25 lakh
10,000 Monthly SIP Value in 5 Years: Rs 9.43 Lakh
Assets: 13,359 crores (November 30, 2020)
Risk: Less than average
Canara Robeco Bluechin Equity Fund
Expense ratio: 0.82% (November 30, 2020)
5 Year Return: 15.52%
7 Year Return: 16.22%
Value of 1 lakh investment in 5 years: Rs 2.06 lakh
10,000 Monthly SIP Value in 5 Years: Rs 9.24 Lakh
Assets: 1122 crores (November 30, 2020)
Risk: Take
Expense Ratio: Funds cheap or expensive
You can understand this with an example. If you have chosen a fund, on which the expense ratio is 1.5 percent. At the same time, you have invested 50 thousand rupees in it. This means that you will have to pay Rs 750 annually to manage this fund. In the same way, if this fund gave a total return of 14 percent, then you will actually get 12.5 percent return.
Contrary to this, if its expense ratio was 1 percent, then you would have to pay a fee of Rs 500 annually for its management and returns would also be 13 percent. It is simple that the higher the expense ratio, the more your expenditure will increase.
(Note: However, it is to be noted here that the guarantee of returns is not guaranteed by more or less expense ratio. Sometimes funds with higher expense ratio give higher returns than funds with lower expense ratio.)