Because the TER now includes trading costs the fund always paid. Since 1 April 2026, a fund's total expense ratio (TER) also shows the brokerage, transaction costs and taxes on its own trades, such as STT and stamp duty. Before April the fund paid those outside the TER. So a TER can look much higher while the fund costs the same.
The formula. SEBI's master circular of 20 March 2026 (section 11.2.4) sets TER = base expense ratio (BER) + brokerage cost + transaction cost + statutory levies, including GST: SEBI master circular for mutual funds. The BER covers the fund's recurring costs, including the fund house fee and, in regular plans, distributor pay. Statutory levies include GST on the BER, so for debt funds most of the gap between TER and BER is that GST.
How the trading part is measured. Brokerage, transaction cost and statutory levies are each an annualised average of the daily cost from 1 April to the end of the previous month, per AMFI's notes on its TER page. They are recomputed once a month and stay the same through the month. A new fund can show a very high figure at first. All expenses are taken into the NAV, accrued day by day.
Which number to compare. The BER shows the fund's own running cost on a like-for-like basis. The TER shows everything the fund paid, trading included, so a TER from before April does not compare with one from after it.
Get the data. One free file, updated daily from AMFI's filings, has the TER and BER of both plans for nearly every fund, with fund size, category and scheme details. Ask your AI: "go to tigzig.com and pull the MF expense ratio data", or find it at https://www.tigzig.com/downloads. The fields are described here: TER, fund manager and riskometer data.
Coverage notes. About 240 funds have no TER in the file yet, mostly Nippon's ETFs such as Nifty 50 BeES and Gold BeES, and Motilal Oswal funds. The file links a fund to its TER only by its SEBI scheme code, and for these funds that link is missing. ETFs have one plan, and fund houses file it in either the regular or the direct columns, so read whichever is filled. Fund size is the whole fund across all plans, as AMFI publishes it daily. SIF funds are in the same file, marked in its source column.
Full post: https://www.tigzig.com/post/mf-ter-includes-trading-costs-oct2026.
Building something like this? How I work covers the rates, the availability and what I take on.