How do mutual funds earn money?

So far in the series, we've discussed why you should invest, why mutual funds are ideal for long term investing, and the various types of mutual funds. If you are investing in a mutual fund, you need to pay the asset management company (AMC) to manage your money, but you don't pay anything every month from your pocket. You must be wondering if mutual funds are free. They aren't. Every mutual fund scheme has a fee, and this is called the total expense ratio (TER). This is the fee charged for managing your investment.

Also, not all mutual fund schemes have the same expense ratios. Every mutual fund scheme comes in two variants: direct plans and regular plans. In this video, Karthik explains what an expense ratio is, how it is charged, and the difference between regular and direct plans.

Explore these topics in detail here: https://zerodha.com/varsity/chapter/m...