Investment Tips: If you also invest in mutual funds or are thinking of doing so, then it is important to pay attention to some important things from the beginning. In which it is very important to understand Base Expense Ratio (BER).

Securities and Exchange Board of India (SEBI) has implemented BER by changing the way of showing expenses. So that investors can get more information about the actual expenses of the fund. Let us know what is base expense ratio.

Earlier it was difficult to understand the expenses

Earlier investors used to understand the expenses of mutual funds through Total Expense Ratio (TER). In which along with fund management fees, taxes like GST and STT and other charges were also included. This made it difficult to clearly understand how much the fund house was actually charging, because all the expenses were shown together.

BER makes it easier to understand expenses

Now in Base Expense Ratio (BER) only the expenses related to running the mutual fund scheme are shown. Whereas, other charges like GST and STT are shown separately.

This gives investors a clear understanding of how much money the fund house is actually charging from investors. Besides, the remaining charge information also becomes easier to understand as it is separate.

What is included in BER?

Important information related to mutual funds is included in Base Expense Ratio (BER). Like fund management fees, distributor commission and registrar and transfer agent (RTA) charges. Due to which investors clearly know what their money is being spent on.

What is the difference between BER and TER?

Talking about the difference between Base Expense Ratio (BER) and Total Expense Ratio (TER), BER only reflects the expenses of the fund house. That means it only includes operating costs. Whereas TER is the total expense that investors have to pay. Along with BER, all taxes and regulatory charges are also included in this.

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