How fund costs affect long-term compounding.
The expense ratio represents the scheme's recurring operating expenses expressed as a proportion of assets, subject to applicable rules and limits. Costs reduce the amount of the portfolio that compounds for investors.
Compare costs in context: a lower-cost product is not automatically better if it does not perform the required portfolio role or creates a different implementation problem. Conversely, persistent unnecessary cost can create a long-term drag.
Always use the current scheme document and current disclosed expense ratio rather than an old number.