Under the Securities and Exchange Board of India's (SEBI) mutual fund regulations, asset management companies (AMCs) are allowed to charge certain operating expenses, or Total Expense Ratio (TER), for managing a mutual fund scheme. This amount is a percentage of the fund’s daily net assets. TER is expressed as an annualised percentage of the assets of the fund. Since the assets of open-ended funds vary on a daily basis, the proportionate TER is accounted for in the scheme’s net asset value (NAV) on every business day when the NAV of the scheme is published.
