Motilal Oswal AMC cuts TER of its mutual fund schemes

Motilal Oswal Mutual Fund announced the revised total expense ratio (TER) of its schemes today. The change is in accordance with the Sebi Circular on ‘Total Expense Ratio (TER) and Performance Disclosure for Mutual Funds’, dated October 22.

The AMC has reduced TER of both the regular and direct plan of the schemes. Revised expense ratios are as below:

Scheme Name	Regular Plan		Direct Plan
	Existing TER	Revised TER	Existing TER	Revised TER
Motilal Oswal Focused 25 Fund	2.63	2.30	1.31	1.06
Motilal Oswal Midcap 30 Fund	2.62	2.24	1.23	0.99
Motilal Oswal Multicap 35 Fund	2.15	1.96	1.34	0.98
Motilal Oswal Long Term Equity Fund	2.52	2.27	1.45	1.05
Motilal Oswal Dynamic Fund	2.36	2.18	1.50	1.15
Motilal Oswal Equity Hybrid Fund	2.94	2.88	1.45	1.26

The AMC mentions that the reduced expense ratio makes it even cheaper for investors. Reduction in TER allows a little more of investors’ money to get invested and hence the returns are likely to improve to the extent of the reduced expense ratio.

Sebi came out with the circular to bring transparency in expenses, reduce portfolio churning and misselling in mutual fund schemes.

Sebi circular reads, ‘all scheme related expenses including commission paid to distributors, by whatever name it may be called and in whatever manner it may be paid, shall necessarily be paid from the scheme only within the regulatory limits and not from the books of the Asset Management Companies (AMC), its associate, sponsor, trustee or any other entity through any route.’

In the same circular, Sebi also banned upfront commissions to the distributors, asking asset management companies to adopt full train model of commission.

The circular further stated that all the fees and expenses charged in a direct plan should not exceed the fees and expenses charged in a regular plan.