How Is TER Calculated in Mutual Funds? A Step-by-Step Guide
The Total Expense Ratio in a mutual fund is not merely a fee line item — it is a daily NAV deduction that compounds silently against your corpus. SEBI caps equity TER at 2.25% and debt TER at 2.00%, yet most investors never model the rupee cost of this drag. This article walks through the precise calculation mechanics, SEBI's regulatory framework, and two Rs corpus worked examples that quantify the real cost of ignoring TER.