The 1.65 pct line is the visible layer. Three more sit underneath.

A typical large-cap active fund Regular plan, AUM held five years, no early exit. The numbers below are what the rupee actually loses every year, in basis points on AUM.

The Setup Large-cap active fund . Regular plan . AUM 1000000 . held 5 years . no exit before 1Y . post-2024 tax regime

Stated TER

printed on the KIM, deducted before NAV is published, paid every day you hold

visible

165bps

Distributor commission embedded in TER

the gap between Regular (1.65 pct) and Direct (0.95 pct) of the same fund. Same scheme. Different fee plate.

hidden in TER

70bps

Brokerage and STT on portfolio churn

paid by the fund when it rotates holdings. 30 to 60 pct annual turnover is typical. Eaten inside the NAV, not on a separate line.

below NAV

13bps

All-in annual drag

stated TER plus embedded churn cost. Compounded over five years on a ten-lakh corpus this is roughly nine pct of the corpus given up.

honest read

178bps

Numbers are illustrative for a typical active large-cap Regular plan. Your fund's specific TER, turnover, and Direct vs Regular gap can be looked up on the AMC factsheet. Past performance . backtest only . not a guarantee.