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Benefit from low expense ratios of ETFs

Expense ratios of ETFs have declined primarily due to fund houses' desire to attract institutional money, chiefly from the EPFO

Sanjay Kumar Singh 

Expense ratios of exchange traded funds (ETFs) have nosedived sharply to as low as five basis points (one basis point or bps is one-hundredth of one per cent). The US, a highly evolved market for passive funds, has a few players like Vanguard that offer ETFs with expense ratios in single digit.

Most charge 25 bps or more. Five years ago, it was unimaginable that expense ratios in India would tumble to such low levels and so fast. Expense ratios of ETFs have declined primarily due to fund houses' desire to attract institutional money, chiefly from the Employees' Provident Fund ...

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First Published: Tue, August 16 2016. 00:30 IST