NAV, fees, and pricing
In this chapter: How NAV is computed daily · TER, exit loads, and stamp duty
NAV is computed end-of-day: (assets − liabilities) ÷ units outstanding. Most schemes have NAV by 11pm daily. The applicable NAV for an investment depends on submission and fund-realisation cut-offs. TER (Total Expense Ratio) is the annual cost of running the scheme, deducted continuously from NAV.
TER caps for equity: 2.25% for AUM under ₹500 cr, sliding to 1.05% above ₹50,000 cr. Debt funds have lower caps. Exit loads typically 1% for redemption within 1 year (equity) or 6 months (debt) — varies by scheme. Stamp duty 0.005% applies on every fresh investment and switch since July 2020. STT 0.001% on equity scheme redemptions. These small charges compound — a 1% TER over 30 years on a SIP can shave 25% off the corpus.
A nuance: Direct vs Regular plan TER difference is recurring, while exit loads are one-time. The compounded difference between Direct (TER 1.0%) and Regular (TER 2.0%) over 30 years is enormous. SEBI also requires that switching from Regular to Direct within the same scheme not attract any exit load — a feature distributors should disclose proactively.