Rationalising TER Once Again

Recently, market regulator Securities and Exchange Board of India (SEBI) proposed a number of changes to the way mutual funds charge expenses to investors. The new slabs would reduce the total expense ratio (TER) of mutual funds for equity, hybrid and solution-oriented schemes. These proposed changes are based on various factors. For example, the Indian mutual fund industry has grown from Rs 6 lakh crore in March 2012 to more than Rs 40 lakh crore in May 2023. The number of investors has also gone up from 1.2 crore in March 2012 to 3.5 crore in March 2023.