Moneycontrol.com - MFs & Hedge Funds earnings
25th Mar '05 - AMCs get paid as a % of AUM (assets under management) to cover expenses related to managing the fund. Typically, expense ratios have to be less than 2.5% of the AUM. The lower the expense ratio vis-a-vis returns the better. Good funds would/should have fair expense ratios, usually around 0.5% or less. Occasionally, the size of the fund, or AUM, is not large enough for the expense ratio to cover the expenses.

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