Best Mutual Funds With Low Expense Ratio: Mutual Funds To Buy

Mutual Funds To Buy: Before investing in mutual funds, it is vital to analyse the fee ratio. Mutual funds charge an annual maintenance fee to cover expenditures such as operational costs, management fees, promotional charges, and so on. It’s vital to note that the greater a fund’s expenditure ratio, the lower the returns on its assets.

Before making an investment, we will learn more about the finest mutual funds with low cost ratios in 2023 in this blog. Let’s get started!

What is a Low Expense Ratio?

To start with, let us define Expense Ratio. An AMC (Asset Management Company) charges clients a fee to manage their investments. This sum encompasses handling fees, administrative expenditures, and operational costs. It is generally expressed as a percentage of the entire amount invested by an investor and is known as the entire Expense Ratio (TER).

The expenditure ratio is entirely within the jurisdiction of India’s market regulator, the Securities and Exchange Board of India (SEBI). It has provided a category-by-category list of expense ratios for mutual funds that fund companies must adhere to.

Equity mutual funds typically have higher expense ratios than debt funds, and active funds have greater charges than passively managed funds. From the standpoint of the investor, a good or low cost ratio for an actively managed mutual fund is between 0.5% and 0.75%.

Top 10 Mutual Funds with Low Expense Ratio

Name of Mutual FundsExpense Ratio
WhiteOak Capital Tax Saver Fund Direct-Growth0.34%
IIFL ELSS Nifty 50 Tax Saver Index Fund Direct-Growth 0.27%
Navi ELSS Tax Saver Direct-Growth 0.4%
ITI Long Term Equity Fund Direct-Growth 0.44%
Indiabulls Tax Savings Fund Direct-Growth0.5%
Quant Tax Plan Direct-Growth 0.57% 
Mirae Asset Tax Saver Direct-Growth0.58%
Shriram Long Term Equity Fund Direct-Growth 0.6%
Canara Robeco Equity Tax Saver Direct-Growth0.64%
Kotak Tax Saver Direct-Growth0.69%

Data as of 31st March 2023.
**This table is for illustrative purposes only. Mutual Funds are subject to market risk. Read all scheme related documents carefully before investing.
*Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.

1. Canara Robeco Equity Tax Saver Direct-Growth

Since its inception on January 2, 2013, the Canara Robeco Equity Tax Saver fund has achieved 14.96% average annualised returns. This ELSS has a financial sector exposure of 33.44%, followed by 9.47% in technology, 7.09% in vehicles, 5.98% in healthcare, 5.71% in energy, and 38.31% in others. Its CRISIL rank has just been raised from 3 to 4. More information may be found below:

  • Fund Size: ₹4685.85 crore 
  • NAV: ₹122.89
  • Expense Ratio: 0.64% 
  • Risk: Very high risk 
  • Minimum Investment:  SIP ₹500, Lump Sum ₹500
  • Type of Fund: ELSS 
  • Annualised 1-Year Return: 0.81%
  • Annualised 3-Year Return: 29.19%
  • Annualised 5-Year Return: 15.59%

2. Shriram Long Term Equity Fund Direct-Growth

This equity-linked savings plan is invested in technology, energy, healthcare, chemicals, automobiles, and finance. It has achieved an average annualised return of 12.85% since its inception on January 25, 2019. It, like the other ELSS on our list, seeks long-term financial appreciation as well as tax benefits under Section 80C. More information may be found below:

  • Fund Size: ₹36.69 Crore 
  • NAV: ₹16.12
  • Expense Ratio: 0.6% 
  • Risk: Very high risk 
  • Minimum Investment:  SIP ₹500, Lump Sum ₹500
  • Type of Fund: ELSS 
  • Annualised 1-Year Return: 0.54%
  • Annualised 3-Year Return: 21.10%
  • Annualised 5-Year Return: NA 

3. Mirae Asset Tax Saver Direct-Growth

The Mirae Asset Tax Saver Fund invests 33.07% in financials and also has exposure in technology, energy, healthcare, automobiles and other sectors. It was officially launched on December 28, 2015, and since then, it has delivered average annualised returns of 18.67%. Check below for more details:

  • Fund Size: ₹14043.04 Crore 
  • NAV: ₹33.40
  • Expense Ratio: 0.58% 
  • Risk: Very high risk 
  • Minimum Investment: SIP ₹500, Lump Sum ₹500
  • Type of Fund: ELSS 
  • Annualised 1-Year Return: – 0.07%
  • Annualised 3-Year Return: 31.99%
  • Annualised 5-Year Return: 15.67%

4. Quant Tax Plan Direct-Growth

Quant Tax Plan allocates 24.24% of its funds to the financial sector, 16.33% to consumer goods, 11.99% to energy, 11.88% to services, 8.15% to materials, and 27.41% to other sectors. This plan was started on January 7, 2013, and it has provided average annual returns of 20.22% since then. It is also one of the mutual funds with the lowest fee ratio. Look at the following list for further information:

  • Fund Size: ₹2779.06 Crore 
  • NAV: ₹246.69
  • Expense Ratio: 0.57% 
  • Risk: Very high risk 
  • Minimum Investment:  SIP ₹500, Lump Sum ₹500
  • Type of Fund: ELSS 
  • Annualised 1-Year Return: 0.53%
  • Annualised 3-Year Return: 51.33%
  • Annualised 5-Year Return: 22.51%

Also Read :- 8 Things to Consider Before You Make Investing Decisions

5. ITI Long Term Equity Fund Direct-Growth

This equity-linked savings scheme has generated an average annualised return of 12.76% in the past 4 years from the date of launch. It invests 31.33% in the financial sector, 9.46% in technology, 9.42% in energy, 7.61% in services, 6.50% in materials and 35.68% in others. More details are as follows: 

  • Fund Size: ₹156.23 Crore 
  • NAV: ₹14.82
  • Expense Ratio: 0.44% 
  • Risk: Very high risk 
  • Minimum Investment:  SIP ₹500, Lump Sum ₹500
  • Type of Fund: ELSS 
  • Annualised 1-Year Return: 6.82%
  • Annualised 3-Year Return: 25.81%
  • Annualised 5-Year Return: NA 

Conclusion

As discussed above, the expense ratio is one of the most important factors that an investor should consider before choosing a mutual fund to invest in. For the benefit of investors, we have provided the details of the ten best mutual funds with low expense ratios 2023. But, investors should do thorough market research to choose a fund with a low expense ratio. 

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