Expense Ratio - Karan Batra

What is an Expense Ratio in Mutual Funds?

An expense ratio is a ratio that measures the per unit cost of managing a fund. The figure is arrived at by dividing the fund’s total expenses by its assets under management. There are various costs the AMC incurs which forms part of the expense ratio. For example, the AMC has a fund management team which consists of highly qualified professionals who track the markets and companies in the portfolio. They make decisions to buy and sell securities to meet the objectives of the scheme. In addition, the asset management company also incurs expenses such as transfer and registrar, custodian, legal, audit fees, and fees to be paid for marketing and distribution of its products. These costs are recovered through its unitholders on a daily basis. The daily net asset values (NAVs) of a fund scheme are reported after deducting such expenses.

There are different components to Expense Ratio.

  • Management fee: A mutual fund is a professionally run scheme so you have professionals who you actually select different schemes and there’s a lot of research that goes into it so the fee which is charged by those professionals is categorized as a management fee.
  • Administrative cost: All the cost associated with customer support, record keeping as well as offices are all categorized under admin cost.
  • Sales and distribution: The cost associated with marketing mutual fund schemes and also the fee which is paid to the different broker’s or distributors are categories under sales and marketing.
Gold Investments

Different Gold investment options in India

You can invest in gold in various forms be it buying gold in the form of jewelry, coins, or bars in physical form, Gold Exchange Traded Funds (ETF) and the sovereign gold bonds (SGB ) in the paper-form. There is an option of gold mutual funds as well, where they are ‘fund of funds’ which further invest in gold ETFs.


Finity Weekly Update (Issue #30): Decoding the elections, corporate earnings revival & more

“If you can keep your head when all about you Are losing theirs and blaming it on you,”
“Yours is the Earth and everything that’s in it, And—which is more—you’ll be a Man, my son!” ~Rudyard Kipling (If, 1910)

The above verse is an excerpt from Rudyard Kipling’s collection and often quoted as Warren Buffett’s favourite poem that keeps him going through volatile times.

With many investors getting worried about the upcoming election results and the uncertainty it brings to the Indian political backdrop and consequently in the stock markets, this poem definitely offers some guidance.

Here’s an interesting perspective to how markets have reacted during the pre-election and post-election seasons in the past 38 years (10 General Elections).

Prima facie, one may concur either one of the following:


Finity Weekly Update (Issue #29): A sticky affair: What’s oil economics without crude politics?

“I’m a free trader, the problem with free trade is you need smart people representing you we have the greatest negotiators in the world, but we don’t
use them, we use political hacks and diplomats.”
-Donald Trump (much before the recent sanctions on Iran)

Leaders of major Asian countries woke up to find themselves in deep water as the alleged poster boy for free & fair trade – Donald Trump made a not-so-free-and-fair announcement to cancel all waivers awarded to the sanctions on Iranian oil. While the reason for such an announcement was mentioned as – an attempt to curb terrorism financing; however, the United States’ equivocal stance on Pakistan does not add much credibility to their apparent concerns around terrorism.

Asia contributes to ~35% of the total global demand for oil and is incidentally a key importer of Iranian oil. Within Asia, China and India are the top two importers of the Persian oil.


The Portion of Debt in your Investment Basket

Did you know that even as a kid in school we had a portfolio of investments? We’d divide our pocket money to get our candy and our favorite cake, sometimes we would have small savings to buy those shoes, or even loan it to a friend for a while. So as we grow our portfolio becomes bigger in terms of scale and range of investments. We focus more on security and future. But how much of our total portfolio should go into these channels? Why do we have to have debt instruments?  Diversification was the first rule learned in investing. The story of when we put all our eggs in one basket and it all breaks when the basket falls down, is familiar to all investors. But perhaps you never got to the part of hstow many eggs and in which basket should we put it in. 

Debt is the basket which offers you security. But the word itself doesn’t give a ring of security because it is often associated with words like ‘loans’. In truth, however, it is essential for every person to invest in some debt instrument in his lifetime. The different products include Public Provident Fund, Fixed Deposit, Bonds, etc.

So when it comes to giving a slice of your portfolio towards debt instruments here are a few things to keep in mind:

  1. The choice of the debt instrument is vital. So ask yourself what do you want it to do? The answer should either be to providing money on short notice or provide stability to long-term investments, both of which is given by debt instruments.
  2. Focus on just the top debt instruments and leave the rest. If you try to pick too many of debt funds you tend to have a mediocre investment which gives high safety but low returns. Don’t try segregating eggs in that debt basket so much.
  3. The allocation of your investment in Debt instruments should be in proportion to your age. The younger you are, the better it would be to invest in growth-based schemes(equity). When you get older you must focus more on stability(debt).

When it comes to Provident Fund or Pension Fund, that are retirement schemes by the Government of India, its sole purpose is to set aside money from a person, preferably during his employment and return it back in a lump sum along with a small amount of interest.

The Public Provident Fund is one of the kinds of PF accounts for any individual at any age, even for an infant. The greatest benefit of this is the returns which are completely tax-free. The account stands as your loan to the Government at the advantage of receiving a tiny amount of risk. It allows you to invest a minimum of Rs.500 to a maximum of Rs.1.5 lakh per year so as to ensure the account remains active for the lock-in period of 15 years. The PF or Pension Funds are to safeguard your lifestyle after retirement, but they are not the only debt instruments you can rely on. Read more about PPF on the Finity website.

A Fixed Deposit is a popular stowaway for your money which saves upon a fixed rate of return during its term. It is applicable for tax and is affected by inflation in the market. It is suitable to use as an emergency fund. Suppose you have a wedding to host or pay for your parent’s medical bills it can be immediately withdrawn to meet those expenses at a reasonable penalty. Whereas, as an investment, it is not a suitable option as it guarantees neither safety nor growth. To know more read the article at Finity’s Blog about Fixed Deposits.

It’s quite a dilemma, isn’t it? The PF or PPF is an important long-term savings scheme for a retirement corpus. However, as mentioned before if the expectation from your debt basket is to help in cases of emergencies a Fixed Deposit would work much better. The PF focuses to help you in the long term and the FD will be more reliable as an emergency cell. Click here to know more on that.

Wouldn’t it be great to have one that serves as both in the long-term and act as an emergency fund? In uh a case Mutual Funds are the way to go! Specifically, the Debt Funds in the Portfolio that invest mainly in bonds, giving you security, relatively higher returns, and high liquidity.

Smart Recommendation Engine

Smart Recommendation Engine

 Powered by proprietary scientific financial models & historical market data

Invest in Direct Plans of Mutual Funds recommended by our Recommendation Engine!

About Smart Fund Engine Work

While Finity allows for investors to choose any Indian mutual fund of their choice, we believe in making superior wealth management accessible to all – this includes making high quality research-backed advisory available as well.

Finity allows investors to browse through different goal-oriented and mutual fund categories to explore and invest in the portfolio of funds that best suit his/her needs.

Personal finance is called personal for a reason – it needs to be personal to every individual. Finity’s smart recommendation engine begins designing a portfolio customised for you basis your profile and needs. It starts with recommending the advisable asset allocation to further picking the best funds which fits into the asset allocation framework.

The smart recommendation engine of Finity app enables the investor to invest in top performing mutual funds. The funds are selected on various critical parameters through Finity’s proprietary research methodology.

How Does the Smart Fund Engine Work?

We have a robust and tested research methodology to recommend the best set to you. We cover a range of factors:

  1. Minimum 3-5 year track record.
  2. Performance and returns over multiple time horizons: 1 year, 3 year and 5 year(additionally 6 months for debt).
  3. Performance in bull and bear markets, during upward and downward movement of interest rates.
  4. Performance of fund manager in other schemes , and over time.
  5. In case of debt, funds with limited or no exposure to private sector corporate debt (especially real estate and construction, but also other sectors like paper, logistics, FMCG, NBFC, etc). Other sovereign debt, we usually only consider funds with banking and/ or PSU debt in the portfolio.
  6. In case of debt, less or more exposure to the yield curve, based on the tenure of the investment.

More features that help you invest



Invest in Direct Mutual funds, with 0% commissions and No Fees.



Get your risk covered by periodically balancing your portfolio.



Switch your regular funds to direct in few clicks, and get superior returns for your investments.



Get access to superior, advance and smart fund reports.



Remain in touch with your portfolio, and make wise decisions with portfolio alerts.

Portfolio Rebalancing

Portfolio Rebalancing on Finity

Portfolio Rebalancing

on Finity

Invest on Finity & get your portfolio rebalanced periodically to maximize your returns.

What is Portfolio Rebalancing?

Rebalancing is a cleansing process that is directed towards eliminating all the funds harmful to your portfolio and replaced by more promising, healthy funds.  

While it is always recommended to stay invested for a long-term, it does not eliminate the need to continuously track, review and actively manage your portfolio. Rebalancing becomes important especially when there’s a change in the fund’s fundamentals or in the broader outlook in general.

Finity’s rebalancing algorithm is a unique proposition which pushes the limits of robo-advisory to a whole new level.

Is Portfolio Rebalancing really necessary?

Here’s a simple example that reinstates the importance of rebalancing: Assuming INR 10L is invested in portfolio and the star fund manager managing the fund exited the fund in the second year, causing a temporary (1-year) dip in the performance.

The difference in both portfolios over a period of 10 years would be as much as INR 1.7 Lakh!

More features that help you invest



Invest in Direct Mutual funds, with 0% commissions and No Fees.



Our engine recommends funds which have outperformed market based on scientific financial models & historical market data.



Switch your regular funds to direct in few clicks, and get superior returns for your investments.



Get access to superior, advance and smart fund reports.



Remain in touch with your portfolio, and make wise decisions with portfolio alerts.

Finity Weekly Update (Issue #28): Mutual Funds shift gears (& portfolios) this election season and more…

As the election season closed in and the pre-poll month of March’19 presented a rally – largely driven by foreign inflows, mutual fund managers capitalised on the rally to get rid of some slag and re-align portfolios in light of post-election expectations.

Here’s what the portfolio rejigs for the month of March 2019 looked like:

As evident, the industry seems to be loading up on retail consumer-oriented sectors while majorly selling off bulky wholesale business sectors. The above graph illustrates only the top five sectors bought and sold; however, the total value of stocks bought & sold in Mar’19 was INR 2,350 Cr. & INR 1,645 Cr. – net buying of over INR 700 Cr. (more…)

Real Estate

Investments in Real Estate, not very Realistic

Home Sweet Home. It’s such a secured feeling to own land and have your property on it. The pride is immense and overwhelming.

Brokers also use these emotional flavours to sell properties. The ease with which one gets a loan these days has lead the masses to invest in real estate easily, but not wisely!!

We have heard our elders say, “Invest in real estate, the future value of the property will earn you a fortune”.

Is this really true?

Here are 6 reasons not to invest in Real Estate.

  1. Low Liquidity:

We buy property with the hope to sell it at a higher cost. But what if an emergency arises and we want liquid cash immediately. Remember your urgency in selling a property is a treat to a potential buyer. Because, your dire need for cash would lead you in selling your property at a lower price than its true value.

  1. Low returns

Most real estate investments fetch you the same amount of return as that of Fixed Deposits. Lines from Nishant Agarwal (managing partner and head (family office), ASK Wealth Advisors )“Considering the rising interest rates and high maintenance cost and tax on rentals and capital gains, I would not suggest investment in physical real estate”.There is no guarantee that you would find occupancy if you are depending on getting income in terms of rent.

Which means, it’s obvious you’re not getting index-beating returns..

  1. Unpredictable

I remember my dad saying  “20 years before if I had bought this house in Kammanhalli, I would have been a crorepati today”. Why?

Because rates increase in real estate depending on the property’s location not on how much you spend on the house, or how does the property look, which makes real estate an unpredictable asset class.

  1. Tracking is a pain.

Mutual Funds are managed by Professional Fund Managers, you have apps to give you alerts, even if you owned more than one scheme.

But how would you track real estate? How do you know that the broker dealing with the property is not a fraud? How would you track your property? You can’t track it daily, can you?

  1. Government Regulation

But the recent disruption announced by our Prime Minister, through “Demonetisation” has curbed the circulation of Black Money by stripping the status of our currency unit.

People don’t even let properties on lease these days, then forget buying a property. Thus reducing the demand of real estate in the market.

  1. Additional expenses.

You need to shell out a bomb to buy a property. Many opt for loans. But in addition, there are other expenses that come along with a property:

  • Maintenance charges
  • Finding a tenant
  • Commission to brokers
  • Utility Bills
  • Taxes

This is exhaustive both financially and physically.

The next time you want to Invest in Real Estate, Think!!

There are better options to invest such as  Mutual Funds. Direct Plans, SIPs, Gold Funds or Equity Mutual Funds help you with wealth creation in the long term. Use “Finity” to discover, track and invest in Mutual Funds.

24K Gold

Invest in Mutual Funds to Build Wealth

Invest in 24K Digital Gold


  • No worry of safe-keeping! Buy 24K Digital Gold on Finity app

  • Get a free & secure locker from BRINK’s, global leader in gold custodian services with 100% insurance cover

  • Sell your digital gold with one click, anytime!

  • Get hassle-free delivery of gold coins/bars to your doorstep.

How does it work?

24K Digital Gold on Finity

Buy the desired quantity or amount of gold above Rs. 1000 and purchase it at the live price quoted.

24K Digital Gold on Finity

Track your gold value & transactions anytime from your gold tracker.

24K Digital Gold on Finity

Sell any amount of gold above Rs. 1 & get the amount credited in your bank account within 72 hours.

24K Digital Gold on Finity

Get gold coins/bars delivered to your doorstep when you have more than 1gms of Digital Gold.

How to buy 24K Digital Gold?

24K Digital Gold on Finity

Track & Sell Your Gold Investments

Track your gold value in our gold tracker. Sell Digital Gold anytime & get the amount credited in your bank account within 72 hours.

24K Digital Gold on Finity

Buy Digital Gold

Buy Digital gold above Rs. 1000 & purchase it at the live price quoted.

24K Digital Gold on Finity

Get Gold Coins/Bars delivered

Get gold coins/bars delivered to your doorstep when you have more than 1gms of Digital Gold.

24K Digital Gold on Finity

Transparent, Safe & Secure

Get a complete understanding about our physical gold options before buying them.

24K Digital Gold on Finity

Gold Transactions & Invoices

Get a complete history of your gold transactions. You can also download gold invoices anytime on Finity app.