The Costs to Read Before You Invest
Expense ratio, exit load, and why a small cost still matters.
Mutual funds charge for running the scheme. You will see this described as an expense ratio or as the total expense ratio in the scheme documents. It is taken from the fund’s assets, so you do not usually get a separate bill, but it does reduce what you earn.
Some schemes also charge an exit load if you withdraw before a stated period. The percentage and the period are specific to that scheme. “I can take my money out” and “I can take it out without a charge” are different sentences.
Gold and silver products have costs too. They are not the making charges you pay at a jewellery shop, and they are not zero. Read the document for the product you are actually being offered.
A cheaper fund is not automatically the right fund. Look at the objective, the risk, the costs, and whether you can leave the money alone for the period you have in mind. If a page will not show the costs, do not guess them.
Keep in mind
Every scheme has costs. They are written down.
An exit load can apply if you leave early.
A lower cost does not make a fund suitable.
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