Sebi makes investing in mutual funds cheaper, caps expense ratio at 1.05%

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The Securities and Exchange Board of India (Sebi) on Tuesday announced major changes to the fee structure for the Rs 25-trillion mutual fund (MF) industry, a decision that will hit the profits of asset management companies (AMCs) but result in savings for investors.

The regulator has capped the so-called total expense ratio (TER) for fund houses with equity assets up to  Rs 500 billion at 1.05 per cent, down from as much as 1.75 per cent charged earlier. AMCs with lower assets under management (AUM) will be allowed to charge a higher TER, based on slabs. Sebi also said the