Expense ratio (TER)

The total expense ratio covers the fund's management fee, its running costs and, in a regular plan, the distributor's commission. It is deducted a little each day, so it never appears as a charge; it shows up only as a lower NAV.

A direct plan and a regular plan of the same scheme hold the same portfolio. The direct plan's TER is lower because it pays no commission, and over many years that difference compounds into a noticeable share of the final corpus.