Higher Expense ratio in Index Funds

Why are so many Asset Administration Corporations (AMCs) charging an expense ratio of 0.3% or increased for varied broad-based index funds and technique index funds? After factoring in monitoring errors, the efficient price to buyers typically exceeds 0.5%. There needs to be rules to regulate these Complete Expense Ratio (TER) prices. What are your ideas on this?

If AMCs proceed to cost such excessive expense ratios, it undermines the aim of attracting buyers to those funds. In my view, the expense ratio for all index funds needs to be capped at 0.1% to make sure they continue to be a gorgeous and cost-effective funding choice for everybody.

There needs to be rules to regulate these Complete Expense Ratio (TER) prices

There’s. SEBI controls expense ratios.

0.1% is simply too low however nonetheless there are AMCs providing index funds at 0.1%, simply to draw prospects

there are AMCs providing index funds at 0.1%, simply to draw prospects

Sadly these AMC doesn’t have AUM and others who cost 0.3+ who has max buyers. I consider 0.1 isn’t too low pondering from future’s perspective as extra investor will be part of and there are usually not a lot issues that they must carry out.

You possibly can’t have better of each worlds. Decide a brand new fund with low expense ratio or follow a dearer however trusted one

Why dont you contemplate ETF when you’ve got a demat account. SBI ETF Nifty 50 cost 0.04 as expense ratio.

Why dont you contemplate ETF when you’ve got a demat account. SBI ETF Nifty 50 cost 0.04 as expense ratio.

It’s not nearly Nifty 50 fund. Nifty Midcap 150, Nifty subsequent 50 Nifty 100 all these and different similar class index fund prices not less than 0.3% which appears increased to me.

If AMCs proceed to cost such excessive expense ratios

i imply 0.3% of your booked revenue is excessive? i’m stunned… you need to be ranting concerning the 15% tax relatively

0.3% of your booked revenue

No, not a % of the earnings.

AFAIK, expense ratios are expreseed as a share of the funding.

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Value issues, this stuff compound too and distinction after few many years wouldn’t be insignificant.

Vanguard appears to have expense ratio round 0.1%, so that could be a good achievable quantity as soon as there may be scale.

thanks! my unhealthy… its on the funding. however i might nonetheless rant about excessive taxes first

It’s not about ranting or complaining. It’s about how AMCs are doing the enterprise and taking reduce from our cash. I perceive excessive tax can also be situation however this needs to be additionally concern for buyers who’re placing cash for long run and giving cost to AMC supervisor for not doing many issues.

i see… however in case of index funds, why not swap to a distinct amc? like hdfc nifty 50 is 0.2% whereas navi is 0.06% for a similar fund. since that is index, we will plot expense vs monitoring error for various amcs and get the optimized one?

It’s not nearly Nifty 50 Index. Nifty Midcap 150, Nifty subsequent 50 Nifty 100 all these and different similar class index fund prices not less than 0.3% which appears increased to me.