Funds
What is expense ratio?
The yearly fee a fund charges, taken as a percentage of your money.
Explained in more detail
It is deducted quietly from the fund every day rather than billed to you, so you never see it leave. Small differences compound into large ones. An index fund may charge under 0.2% a year while an actively managed fund often charges over 1.5%.
An example
For instanceA 1.5% fee on ₹10 lakh is ₹15,000 a year, every year, whether the fund gains or loses.
Why this matters to you
You will meet this word in broker apps, company results and market news. Knowing what it means is not the goal on its own. The goal is being able to judge whether a number is good or bad for the investment you are actually holding.
On AlphaVik, any time expense ratio appears in a view or a lesson, you can hover or tap the word and this explanation comes with it. You never have to leave the page to look something up.