Quantum MF lowers fund expenses

Quantun Mutual Fund today said it has lowered the fund expenses for two of its schemes, a move that would lead to higher return for the investors putting their money in these funds.

Quantum MF said in a statement that it has lowered the expense ratio to 1.25%, from 1.5% previously, for its Quantum Long Term Equity Fund and Quantum Tax Saving Fund with effect from June 1. Also read: Sensex to remain range-bound with tinge of red: Quantum AMC
Expense ratio is deducted from a mutual fund's AUM (asset under management) to pay for annual recurring expenses, which includes management fees, Registrar & Transfer Fees, Custodian fees, marketing and distribution costs etc.
The lowering of expense ratio would result in more of the investor money getting invested and a relatively better return for the investors.
Quantum MF said that the lowering of expense ratio to 1.5% would result in an overall decline of 16.67% per annum for each of the two funds.
Giving an example, the fund house said that if a fund has an expense ratio of 1.5% and earns 18% on its investments, investors are left with a net return of only 16.5%.
However, with the reduction in expenses to 1.25%, the net return will enhance to 17% assuming the same rate of return on the investment, it added.
Commenting on the move, Quantum Asset Management Co CEO Jimmy A Patel said that the lowered expenses would add more value to its investors.
Earlier in June 2010, the fund house had lowered the expense ratio on its Quantum Long Term Equity Fund from 2.05% to 1.5%, while the same for Quantum Tax Saving Fund was reduced from 2.5% to 1.5%.
Quantum Mutual Fund was launched in 2006 and currently manages 7 funds.