Financial literacy and more
There is complete transparency in a mutual fund,
The expenses that each fund incurs can be seen using a term called the expense ratio,
This is a figure expressed in percentage terms.
It represents the total cost that is incurred for managing and running the fund.
This figure is reduced from the NAV so it has already been adjusted in the funds returns.
Mutual funds are not free so investors need to understand this point.
There is a cost attached to investing using mutual funds but this is not too high.
Depending on the nature of the fund the cost can be anything from 0.1 per cent to 2.5 per cent.
This cost is per annum so it is an annual cost.
This is not a very high amount considering the services and benefits that are received using mutual funds,