A suspiciously low expense ratio on a silver Fund of Fund (FoF) has sparked debate on hidden costs in India’s mutual fund space, with fintech platforms and asset managers accused of masking true fees.
In a LinkedIn post, analyst Nishtha Narang flagged how some FoFs investing in Exchange Traded Funds (ETFs) are advertising misleadingly low Total Expense Ratios (TERs) — without disclosing the underlying ETF’s own charges. Advertisement
“An unsuspecting investor might feel smart for finding a ‘low-cost’ fund and invest happily — unaware that they’re being charged more than a regular MF,” Narang wrote.
While ETFs are generally known for low costs, FoFs built on top of them carry two layers of expenses: one charged by the FoF itself, and another by the underlying ETF. Yet many fund houses o