what is ter in mutual fund

The Total Expense Ratio (TER) is a measure of the total costs associated with managing and operating an investment fund, such as a mutual fund. It includes management fees, trading fees, legal fees, auditor fees, and other operational expenses. The TER is calculated by dividing the total cost of the fund by the fund’s total assets and expressing it as a percentage. This ratio is important to investors as it affects their returns, and actively managed funds generally have a higher TER than passive funds. The TER can change over time, impacting the funds returns, and it is important to consider the TER when evaluating the performance of a mutual fund. Higher TER means higher expenses, which can diminish the funds returns, so investors should be mindful of the TER when making investment decisions.