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: zerodha.com/varsity/chapter/m...

[@GSSingh]

Very informative video. Even I didn't know how TER charged on daily basis.

[@NiVi432]

MF is good for risk diversification but looks like in most cases, it is better to directly invest in equities if you have a good capital. Index funds however would be great for long term.

[@mePrafull]

very much helpful in understanding TER i thought it was annually deducted but was corrected after watching this video. Thank you

[@dark-bh9cy]

Bro is cool, please teach all things which is there in investments... You r just great

[@ChiragYadav-yf5xv]

Thank you sir for all your teaching and delivering such valuable information.

[@chinnappav1962]

Thank you Sir for your valuable information

[@PyDataScience]

Very informative... Thank you

[@ChandraMouli-yx7rk]

TRUELY ENLIGHTING THE NEWBIE TRADERS AND UPGRADING ON FINANCIAL SIDES. THANQ YOU RANGAPPA

[@RushiRavalR]

Keep posting such an informative video 👍

[@user-py9zt4vh6d]

8:14 Sir why Direct Plan has greater NAV, as you told previously that Direct Plan should be cheaper?

[@daehgge]

Excellent Ice Cream analogy !!

[@sumitroy508]

We are very fool sir. This is very interesting and knowledgeable.

[@sridevi4951]

I have 2 regular MFs. It was started by MF agent back in 2018 when I didn't know anything about MF. Now do you suggest to switch it to Direct or does it affect compounding effect?

[@vnvrao3117]

Nice post

[@hukamchandmehra366]

Ok Sir

[@prashantnsk]

Dollops cone was awesome 🍦

[@kadapallavineshnithinkumar2473]

8:46 value not price 👏

[@sushilataparia6962]

Your content is so straight and yet interactive sir. You are an inspiration for teachers and trainers. " Beacon of India for Financial Literacy". Huge fan...Keep going sir.

[@sureshsalam9597]

May I know the name list of person who get crores from sip,some name

[@raghavendrabg6311]

Informative. Precise and concise . Can you also make some video on what should investors do with MF . Should he keep booking profits and keep buying the units when it goes low or simply invest till it reaches its goal

[@varsitybyzerodha]

Unlike stocks, mutual funds should always be for the long term perspective, Raghavendra. Here's something we've been vocal about: twitter.com/CoinByZerodha/status/1642839707590758401

[@ramraju4523]

hi karthick sir, I am a student and this video is really helpful for me. As a student of finance, I have learned many things that my MBA class failed to teach us. Can you make a video of about index funds and other equity funds about their comparison

[@varsitybyzerodha]

Hi Ram, we'll look into the possibilities, thank you.

[@kunal2927]

Hi Karthik, I have been investing in Mutual funds since 2012 but I didn’t know very basic details about it and I must say that I am learning a lot with your video series. I have a question, how do I switch my Regular MF purchases done in past to Direct mode now?? Thanks in advance

[@mysteriousgamer7068]

🙇‍♂️thank you sir 😊

[@rathinatesan500]

Clear explanation. Thank you Sir. I have a query. I already have invested in regular mutual funds. How Can I change my existing regular mf to direct mutuallfunds.

[@varsitybyzerodha]

Hi, Regular mutual funds cannot be converted to direct mutual funds. However, clients can redeem the regular mutual funds and invest in the direct mutual fund of the same plan.

[@arjunclasses7605]

❤️

[@hukamchandmehra366]

Where we go For MF BANK

[@visweswaranv4736]

Good Informative Video with Facts, As Mutual Fund units are considered Assets, How does the Mutual Fund Units (Assets) transferred to their Nominees on the Demise of Unit Holders?, whom they need to approach?, Should they need to Contact Platforms like Zerodha or the AMC's Personally? Kindly share Inputs as in the Investor has chosen a Direct Fund and had Invested in 3-5 AMC's in the Past 10-15 or more years

[@varsitybyzerodha]

Hi Visweswaran, when you invest through Zerodha Coin, your nominee details for your demat account will hold good for your mutual funds as well, because mutual funds are stored in demat mode with us. Here's how you can add a nominee: support.zerodha.com/category/mutual-funds/understanding-mutual-funds/about-coin/articles/nomination-mutual-funds

[@visweswaranv4736]

@@varsitybyzerodha thanks for the Reply, It's always better to Appointment Nominees to our Assets, The Question is How can our registered Nominees claim Mutual Fund Units held in demat form, either they should approach the demat account Company (Zerodha) or CDSL or the AMC'S, do share your inputs!

[@stevecloud4soft]

Some schemes are not with direct plan, does it mean that we would avoid such schemes.

[@varsitybyzerodha]

Hi Steve, no. It doesn't mean that. Do reach out to us on tradingqna.com, so we can have this elaborated for you.

[@50karanbebale81]

Hii sir i am Karan i am in second year i haven't started earning money yet but i would i to invest what will you recommend me and

[@varsitybyzerodha]

Hi, we don't recommend anything as such. You can check out the Varisty series to learn more about stock markets.

[@aniket19931993]

Expense ratio is paid per day?? This I never knew! Thats crazy!

[@varsitybyzerodha]

Expense Ratio is deducted on daily basis as tiny fractions of annual value. So everyday when AMC declares NAV, Expense Ratio is already deducted. You can learn more here: zerodha.com/varsity/chapter/mutual-fund-expense-ratio-direct-and-regular-plans/

[@ArunKumar-rl3rp]

Kindly lower the irritating background noise (music).

[@varsitybyzerodha]

Hi Arun, we'll look into this. Thanks!