Northspread
Formula sheet/NISM Series V-A: Mutual Fund Distributors/Net Asset Value, Total Expense Ratio & Pricing of Units
[ NET ASSET VALUE, TOTAL EXPENSE RATIO & PRICING OF UNITS ]

Total Expense Ratio (TER) Structure

Total TER=Base Expense Ratio(BER)+Brokerage Execution Cost(max0.06%cash/0.02%F&O)+Transaction Costs+Statutory Levies(GST)\text{Total TER} = \text{Base Expense Ratio} (BER) + \text{Brokerage Execution Cost} (max 0.06\% cash / 0.02\% F\&O) + \text{Transaction Costs} + \text{Statutory Levies} (GST)
SEBI Open-Ended Equity Slabs:\text{SEBI Open-Ended Equity Slabs}:
•First Rs500Cr:max2.10%∣Next Rs250Cr:max1.90%∣Next Rs1,250Cr:max1.60%• \text{First Rs} 500 Cr: max 2.10\%\quad\Big|\quad \text{Next Rs} 250 Cr: max 1.90\%\quad\Big|\quad \text{Next Rs} 1,250 Cr: max 1.60\%
•Next Rs3,000Cr:max1.50%∣Next Rs5,000Cr:max1.40%∣Next Rs40,000Cr:0.05%reduction per Rs5,000Cr slab∣Balance:0.95%• \text{Next Rs} 3,000 Cr: max 1.50\%\quad\Big|\quad \text{Next Rs} 5,000 Cr: max 1.40\%\quad\Big|\quad \text{Next Rs} 40,000 Cr: 0.05\% \text{reduction per Rs} 5,000 \text{Cr slab}\quad\Big|\quad Balance: 0.95\%
Index Funds&ETFs:Flat maximum TER cap of0.90%of daily net assets.\text{Index Funds} \& ETFs: \text{Flat maximum TER cap of} 0.90\% \text{of daily net assets}.
Variables

Direct plans must have a strictly lower expense ratio reflecting zero distribution commissions.

Exam note

Any change in Base Expense Ratio (BER) must be communicated to unitholders at least 3 working days in advance.

Worked examples
Mutual Fund Net Assets and NAV per Unit Calculation

A diversified equity mutual fund scheme has 2.65 Crore units outstanding. Balance sheet data: Market value of equity shares = Rs 230 Cr, Money market instruments = Rs 5.0 Cr, Accrued dividends receivable = Rs 2.39 Cr, Receivables on shares sold = Rs 2.34 Cr. Liabilities: Payables for shares purchased = Rs 7.5 Cr, Management and audit fees payable = Rs 0.41 Cr. Compute Scheme Net Assets and NAV per unit.

Exit Load and Net Redemption Proceeds Calculation

An investor redeems 1,500 units of a hybrid mutual fund scheme when the NAV is Rs 45.80. The scheme charges an exit load of 1.00% if redeemed within 1 year. The units are redeemed after 8 months. Calculate the Repurchase Price, total exit load deducted, and net proceeds credited to the investor's bank account.

Segregated Portfolio Creation & Cost Allocation

An investor holds 10,000 units of a corporate bond fund purchased at Rs 15.00 per unit (Cost = Rs 1,50,000). Following a credit downgrade of an issuer, the scheme segregates the stressed bond. Immediately prior to segregation, Total Portfolio NAV was Rs 12.00. The distressed bond NAV transferred to the segregated portfolio is Rs 2.00 per unit, and Main Portfolio NAV becomes Rs 10.00. Calculate the cost of acquisition for units in the Segregated and Main Portfolios.