{"id":732,"date":"2020-05-17T14:17:05","date_gmt":"2020-05-17T14:17:05","guid":{"rendered":"https:\/\/www.cashvisory.com\/blog\/?p=732"},"modified":"2020-07-09T08:19:02","modified_gmt":"2020-07-09T08:19:02","slug":"importance-of-expense-ratio-while-selecting-investments","status":"publish","type":"post","link":"https:\/\/www.cashvisory.com\/blog\/importance-of-expense-ratio-while-selecting-investments\/","title":{"rendered":"Importance of Expense Ratio while selecting Investments"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"732\" class=\"elementor elementor-732\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-12d9aed elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"12d9aed\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-9710852\" data-id=\"9710852\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-a3f78c4 elementor-widget elementor-widget-text-editor\" data-id=\"a3f78c4\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">The common retail investor is getting more and more price sensitive while selecting their investments. This is definitely a good thing, given the background of extremely high charges packaged into traditional financial products. However, this frenzy to reduce charges needs to be approached with caution. By focusing only on cutting down the cost of investment management or advice, we might end up compromising the quality of the same.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-c7817ec elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"c7817ec\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-8129b28\" data-id=\"8129b28\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-a4d459c elementor-widget elementor-widget-text-editor\" data-id=\"a4d459c\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">We breakdown the impact of charges on your returns and explain what is reasonable and what is not. These charges are usually represented in the form of expense ratio for each fund. Let us understand what expense ratio is. <\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-0132690 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"0132690\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-5657694\" data-id=\"5657694\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-f6a0714 elementor-widget elementor-widget-text-editor\" data-id=\"f6a0714\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<h3><span style=\"font-weight: 400;\">What is expense ratio?<\/span><\/h3>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-a313a1c elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"a313a1c\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-280b4e7\" data-id=\"280b4e7\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-e03c18d elementor-widget__width-initial elementor-widget elementor-widget-text-editor\" data-id=\"e03c18d\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">The expense ratio, also called management expense ratio or total expense ratio (TER), refers to the percentage of funds assets that are used for all operating expenses of the fund. These include charges like management fees, administrative cost, distribution expenses, etc.<\/span><\/p><p><span style=\"font-weight: 400;\">For example:\u00a0<\/span><\/p><ul><li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Fund A has assets under management of Rs 10,00,00,000<\/span><\/li><li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Fund A is charging Rs 20,00,000 for all its operating expenses<\/span><\/li><li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">This would amount to a TER of 2% {(20,00,000 \/ 10,00,00,000) x 100}<\/span><\/li><\/ul>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-cd94f03 elementor-widget__width-auto elementor-widget elementor-widget-image\" data-id=\"cd94f03\" data-element_type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img decoding=\"async\" src=\"https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/elementor\/thumbs\/image001-qnidf73romcjsex5ah6l77erse72119esqgjp0g420.png\" title=\"image001\" alt=\"expense ratio\" loading=\"lazy\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-2e8876f elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"2e8876f\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-60343fe\" data-id=\"60343fe\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-103028b elementor-widget elementor-widget-text-editor\" data-id=\"103028b\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<h3><span style=\"font-weight: 400;\">What is the impact of expense ratio on my returns?<\/span><\/h3>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-24b53ea elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"24b53ea\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-83736b6\" data-id=\"83736b6\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-db93dcf elementor-widget elementor-widget-text-editor\" data-id=\"db93dcf\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">Generally Mutual fund (MF) expense ratios range somewhere between 0.75% &#8211; 1.5%. An expense ratio of 2% &#8211; 2.5% or more is considered high. There are solutions such as exchange traded funds (ETFs) with expense ratios around 0.2% &#8211; 0.5% (since they are not actively managed)<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-a4b269f elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"a4b269f\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-eaf2412\" data-id=\"eaf2412\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-a948a55 elementor-widget elementor-widget-text-editor\" data-id=\"a948a55\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">Let us compare an investment of Rs 10,00,000 at a 10% annual rate of return for the purpose of these projections:<\/span><\/p><ul><li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">A high cost MF with a TER of 2.5%<\/span><\/li><li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">A nominal cost MF with a TER of 1%<\/span><\/li><li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">A low cost ETF with a TER of 0.3%<\/span><\/li><\/ul>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-92769f1 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"92769f1\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-1bd7a8c\" data-id=\"1bd7a8c\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-e5bea4d elementor-widget elementor-widget-image\" data-id=\"e5bea4d\" data-element_type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img fetchpriority=\"high\" decoding=\"async\" width=\"768\" height=\"156\" src=\"https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/05\/image-768x156.png\" class=\"attachment-medium_large size-medium_large wp-image-737\" alt=\"mutual funds versus ETF\" srcset=\"https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/05\/image-768x156.png 768w, https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/05\/image-300x61.png 300w, https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/05\/image-1024x209.png 1024w, https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/05\/image.png 1267w\" sizes=\"(max-width: 768px) 100vw, 768px\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-143911c elementor-widget elementor-widget-image\" data-id=\"143911c\" data-element_type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img decoding=\"async\" width=\"941\" height=\"522\" src=\"https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/05\/image003.jpg\" class=\"attachment-large size-large wp-image-736\" alt=\"importance of expense ratio\" srcset=\"https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/05\/image003.jpg 941w, https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/05\/image003-300x166.jpg 300w, https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/05\/image003-768x426.jpg 768w\" sizes=\"(max-width: 941px) 100vw, 941px\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-6137297 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"6137297\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-f7a817d\" data-id=\"f7a817d\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-b1718c4 elementor-widget elementor-widget-text-editor\" data-id=\"b1718c4\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">As is clear from the above projections, a lower expense ratio directly translates to higher returns. This gets more pronounced as we look at longer time horizons due to the compounding effect. A difference of <\/span><b>1.5%<\/b><span style=\"font-weight: 400;\"> in TER between the high cost and nominal cost MF leads to a difference of <\/span><b>Rs 40,28,038 <\/b><span style=\"font-weight: 400;\">in returns<\/span> <span style=\"font-weight: 400;\">over a 30 year period. Similarly the <\/span><b>0.7%<\/b><span style=\"font-weight: 400;\"> difference in TER between the nominal cost MF and the low cost ETF leads to a difference of <\/span><b>Rs 24,83,033<\/b><span style=\"font-weight: 400;\"> over a 30 year period. <\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-48cc8a0 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"48cc8a0\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-16a6a06\" data-id=\"16a6a06\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-022736b elementor-widget elementor-widget-text-editor\" data-id=\"022736b\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<h3><span style=\"font-weight: 400;\">What are the other considerations?<\/span><\/h3>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-db1dcb9 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"db1dcb9\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-55c8ef1\" data-id=\"55c8ef1\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-68d6a9c elementor-widget elementor-widget-text-editor\" data-id=\"68d6a9c\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">The impact of expense ratio on the returns are substantial enough to make it an important consideration in the decision making process while selecting MFs or ETFs. However, there are other factors that impact the returns which might be ignored if we solely fixate on the cost. It is important to take note of these in order to arrive at the final decision. Some of the key ones are as follows:<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-002ca08 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"002ca08\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-ff01da9\" data-id=\"ff01da9\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-dd26e64 elementor-widget elementor-widget-text-editor\" data-id=\"dd26e64\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<h4><span style=\"font-weight: 400;\">Fund historical returns<\/span><\/h4>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-b079c32 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"b079c32\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-5b5c5e6\" data-id=\"5b5c5e6\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-5354f37 elementor-widget elementor-widget-text-editor\" data-id=\"5354f37\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">Let\u2019s say we were to choose between the following investment options:<\/span><\/p><ul><li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">India Technology MF (TER 1%) &#8211; 10 year annualised returns of 11.3% before charges<\/span><\/li><li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">India Technology ETF (TER 0.3%) &#8211; 10 year annualised returns of 9.8% before charges<\/span><\/li><\/ul>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-2c36624 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"2c36624\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-3e19928\" data-id=\"3e19928\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-2f41887 elementor-widget elementor-widget-text-editor\" data-id=\"2f41887\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">The 30 year returns for the MF above will be <\/span><b>Rs 1,71,66,820 <\/b><span style=\"font-weight: 400;\">while the return for the ETF will be <\/span><b>Rs 1,38,99,829<\/b><span style=\"font-weight: 400;\">. The returns from the MF are higher than the ETF in spite of the higher charges. Hence, the impact of the actual performance of the MF or ETF is equally important when selecting the appropriate investment vehicle. <\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-9379b90 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"9379b90\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-3846d30\" data-id=\"3846d30\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-79bf95a elementor-widget elementor-widget-text-editor\" data-id=\"79bf95a\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">Comparing the MF or ETF with the benchmark for similar funds or indexes is a good strategy to gauge the relative performance. That would help you compare whether or not the fund is outperforming the benchmark in the sector.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-e379d14 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"e379d14\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-b121405\" data-id=\"b121405\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-7627ea4 elementor-widget elementor-widget-text-editor\" data-id=\"7627ea4\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<h4><span style=\"font-weight: 400;\">Portfolio optimisation strategies<\/span><\/h4>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-43de8f0 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"43de8f0\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-da0e91d\" data-id=\"da0e91d\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-e3a86af elementor-widget__width-initial elementor-widget elementor-widget-text-editor\" data-id=\"e3a86af\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">Beyond looking at the expense ratio and fund\u2019s historical returns, the entry, exit and optimisation strategies into your portfolio are critical in determining your overall returns. Imagine a lump sum investment is made right before a financial market crash, it could take years to recoup the loss in value of investments. Hence, having an understanding and knowledge about time tested investment strategies like <\/span><a href=\"https:\/\/www.investopedia.com\/terms\/d\/dollarcostaveraging.asp\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">dollar cost averaging<\/span><\/a><span style=\"font-weight: 400;\"> and automated <\/span><a href=\"https:\/\/www.investopedia.com\/terms\/r\/rebalancing.asp\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">fund rebalancing<\/span><\/a><span style=\"font-weight: 400;\"> will reduce risks within your portfolio and safeguard returns. <\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-9eb92bc elementor-widget__width-auto elementor-widget elementor-widget-image\" data-id=\"9eb92bc\" data-element_type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img decoding=\"async\" src=\"https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/elementor\/thumbs\/image002-qnidf73rfuldk4r99wquhet3np1kjv0i52n2vbnnqg.png\" title=\"image002\" alt=\"portfolio optimisation strategies\" loading=\"lazy\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-21160c3 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"21160c3\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-14cf71a\" data-id=\"14cf71a\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-f294098 elementor-widget elementor-widget-text-editor\" data-id=\"f294098\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<h3><span style=\"font-weight: 400;\">Bottom Line<\/span><\/h3>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-ee5dde1 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"ee5dde1\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-cc4529a\" data-id=\"cc4529a\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-902a856 elementor-widget elementor-widget-text-editor\" data-id=\"902a856\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">The expense ratio is one of the most important factors while selecting a MF or ETF. However, there are other factors like fund performance, investment advice, portfolio management and optimisation that affect long term returns and need to be taken into account as well.\u00a0<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-72dcf45 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"72dcf45\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-ee3c9c1\" data-id=\"ee3c9c1\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-d1481c9 elementor-widget elementor-widget-text-editor\" data-id=\"d1481c9\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">A good balance of all the above factors is required to maximise your returns. This is where it is important to ensure you have the necessary knowledge and expertise at your disposal to weigh the various factors and guide your investment portfolio decisions. Working with an adept investment advisor or robo advisor can make a huge difference in determining long term returns.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>The common retail investor is getting more and more price sensitive while selecting their investments. This is definitely a good thing, given the background of extremely high charges packaged into traditional financial products. However, this frenzy to reduce charges needs to be approached with caution. By focusing only on cutting down the cost of investment [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1063,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"site-sidebar-layout":"default","site-content-layout":"default","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[5],"tags":[],"class_list":["post-732","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investments"],"uagb_featured_image_src":{"full":["https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/05\/image3.png",624,507,false],"thumbnail":["https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/05\/image3-150x150.png",150,150,true],"medium":["https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/05\/image3-300x244.png",300,244,true],"medium_large":["https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/05\/image3.png",624,507,false],"large":["https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/05\/image3.png",624,507,false],"1536x1536":["https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/05\/image3.png",624,507,false],"2048x2048":["https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/05\/image3.png",624,507,false]},"uagb_author_info":{"display_name":"Admin","author_link":"https:\/\/www.cashvisory.com\/blog\/author\/admin\/"},"uagb_comment_info":6,"uagb_excerpt":"The common retail investor is getting more and more price sensitive while selecting their investments. This is definitely a good thing, given the background of extremely high charges packaged into traditional financial products. However, this frenzy to reduce charges needs to be approached with caution. By focusing only on cutting down the cost of investment&hellip;","_links":{"self":[{"href":"https:\/\/www.cashvisory.com\/blog\/wp-json\/wp\/v2\/posts\/732","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.cashvisory.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.cashvisory.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.cashvisory.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.cashvisory.com\/blog\/wp-json\/wp\/v2\/comments?post=732"}],"version-history":[{"count":17,"href":"https:\/\/www.cashvisory.com\/blog\/wp-json\/wp\/v2\/posts\/732\/revisions"}],"predecessor-version":[{"id":1465,"href":"https:\/\/www.cashvisory.com\/blog\/wp-json\/wp\/v2\/posts\/732\/revisions\/1465"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.cashvisory.com\/blog\/wp-json\/wp\/v2\/media\/1063"}],"wp:attachment":[{"href":"https:\/\/www.cashvisory.com\/blog\/wp-json\/wp\/v2\/media?parent=732"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.cashvisory.com\/blog\/wp-json\/wp\/v2\/categories?post=732"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.cashvisory.com\/blog\/wp-json\/wp\/v2\/tags?post=732"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}