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Cafemutual’s analysis on index funds shows that multi-cap index funds, sectoral index funds and mid cap index funds have the highest distributable TER across index fund categories.
Distributable TER is the part of the expense ratio of a scheme which the fund house is willing to share with distributors as commission. It is simply the difference between TER of regular plans and direct plans.
Multi cap index funds have the highest average distributable TER of 0.66%.
While sectoral index funds occupy the second spot with average distributable TER of 0.63%, mid cap index funds category is at the third position with average distributable TER of 0.62%,
Small cap index funds and large and mid cap index funds complete the top five with average distributable TER of 0.61% and 0.50%, respectively.
Target maturity index funds have the lowest average distributable TER of 0.31%. Overall, the average distributable TER of index funds is 0.53%.
Cafemutual did this analysis of over 280 index funds including 99 target maturity, 73 large cap, 48 sectoral, 21 multi cap, 17 large & mid cap, 17 mid cap and 14 small cap index funds.
Let us look at the table to know more about average distributable TER:
|
Index Fund Type |
Avg. Distributable TER (%) |
|
Multi Cap |
0.66 |
|
Sector |
0.63 |
|
Mid Cap |
0.62 |
|
Small Cap |
0.61 |
|
Large & Mid Cap |
0.50 |
|
Large Cap |
0.46 |
|
Target Maturity |
0.21 |
