B LOWER EXPENSE RATIO, HIGHER RETURNS
If a debt fund gives an average return of 7% on Rs1 lakh invested, the actual return will go down to 6% if the annual cost (expense ratio) the fund house levies is 1% of the corpus and 5% if the fund house has a 2% expense ratio.
Amount invested every year: Rs1 lakh
34,71,925
Rate of return 5% 6% 22,65,749 38,99,272 13,20,678 5,80,191
24,67,252 13,97,164
5,97,531
5 years
10 years
15 years
20 years Source: Mint research