It’s the annual fee charged by the fund to manage your money, expressed as a percentage of AUM (Assets Under Management). The Securities and Exchange Board of India (SEBI), the regulatory authority for mutual funds, has laid down a framework that determines the maximum permissible expense ratio for different mutual fund schemes. All mutual fund houses are mandated to follow this SEBI-approved structure. The Total Expense Ratio (TER) covers various expenses incurred by the fund house for their day-to-day management of the funds, brokerage for stock purchases, admin expenses, transactional charges, and commission given to the distributors