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RupeeCase notes . Topic

Costs: MF, PMS, RupeeCase

What funds, PMS and rules based baskets really cost, what a factsheet hides, and how structure and tax change the answer.

  • 25notes in this topic
  • 6to read in order
  • 3questions answered

01Read in this order

Six notes that carry the idea.

  1. 01Direct vs regular: the finder's fee you pay forever6 min .
  2. 02A 1 percent fee does not cost you 1 percent11 min .
  3. 03The mutual fund cost stack6 min .
  4. 04The true cost stack of a regular plan6 min .
  5. 05ETF vs index fund: cheaper sticker, not the cheaper hold6 min .
  6. 06PMS 2 and 20: the rupee math6 min .

02Every note

25 notes, newest first.

  1. The index rewrites itselfThe Nifty 50 made 41 constituent changes from 2009 to 2022, 2.93 a year, with a twenty rank buffer between joining and leaving and a cap of five additions a year. . 8 min
  2. A 1 percent fee does not cost you 1 percentOn Rs 10 lakh at 12 percent gross for 25 years a 1.00 percent fee costs 20.1 percent of the ending corpus, and more than half of that is charged in the last five years. . 11 min
  3. The Rs 1.25 lakh you throw away every yearRealising gains yearly in your own name beats deferring to exit up to about Rs 60 lakh of portfolio, because ten shots at the exemption are worth Rs 1,56,250 of tax. . 12 min
  4. The diversifier that concentratesFinancial services is 37.7 percent of the Nifty 50, so a sector fund that must hold 80 percent financials pushes a 30 percent sleeve past half the book in one sector. . 8 min
  5. SEBI's overlap cap and the overlap you ownSEBI's February rule treats two schemes as duplicates above 50 percent overlap but carves out large caps, which is exactly where two plain funds share 60 to 80 percent. . 5 min
  6. Funds that vanishedAbout one in four Indian large cap funds disappeared over ten years, and the category average you see is the average of the survivors. . 5 min
  7. Multicap vs flexicap: the same shelf, opposite mandatesA multicap must keep at least 25 percent each in large, mid and small caps while a flexicap can hold no small caps at all, which is why fund houses converted in 2020. . 5 min
  8. The Rs 50 lakh doorThe PMS minimum is a SEBI rule about the investor, raised from Rs 25 lakh in 2019, and the ladder from a Rs 500 SIP to a Rs 1 crore AIF opens onto mostly the same listed market. . 5 min
  9. The cost of switching fundsHopping out of a fund inside a year on a Rs 11.5 lakh pot costs about Rs 41,500 in tax and exit load, so the new fund must out earn the old by 3.6 percent before it earns a rupee. . 5 min
  10. The base rate of beating the marketSPIVA India shows 73 of 100 active large cap funds and 82 of 100 mid and small cap funds trailed their benchmark over the ten years to June 2025. . 5 min
  11. The fund that got too big to beat the indexA six percent conviction position is Rs 30 crore in a Rs 500 crore fund and Rs 2,400 crore at Rs 40,000 crore, which no midcap can absorb, so the fund drifts into the index. . 5 min
  12. The NAV mythRs 10,000 in a Rs 10 NAV fund and in a Rs 500 NAV fund with the same portfolio are worth the same Rs 11,000 after a 10 percent rise, because NAV is not a price. . 5 min
  13. Star ratings are the rear view mirrorOnly about one in four top quartile funds is still there a few years later, which is what a coin flip sorted into four buckets would deliver. . 5 min
  14. ETF vs index fund: cheaper sticker, not the cheaper holdA 0.04 percent ETF loses to a 0.07 percent index fund for a monthly SIP once Rs 20 of brokerage, the spread and demat charges land twelve times a year. . 6 min
  15. IDCW vs Growth: the dividend that is your own moneyA fund payout drops the NAV by the same amount and is taxed at slab, so Rs 10 lakh over twenty years ends near Rs 96 lakh in Growth and Rs 69 lakh on the IDCW path. . 6 min
  16. The tax you pay for someone else's tradesA PMS realises gains in your name every year while a fund defers to exit, and on the same 14 percent gross over ten years the structure alone keeps five to twelve lakh more invested. . 6 min
  17. Direct vs regular: the finder's fee you pay foreverA one point trail commission on Rs 10 lakh over twenty years costs Rs 14.5 lakh, almost one and a half times the original cheque, for a fund sold once. . 6 min
  18. Pull your CAS before you buy a seventh fundOne consolidated account statement showed six funds with 62 percent of the money in the same twelve stocks, Rs 12,800 a year of fees and Rs 72,000 of forgotten debt. . 6 min
  19. Hybrid: one word, three productsUniverse hybrid, SEBI asset class hybrid and multi asset hybrid carry worst windows from 5 to 27 percent under the same label, so read the asset mix, not the adjective. . 5 min
  20. Recipe versus paragraph: reading a methodology pageUniverse, entry rule, weight method and cadence decide whether a strategy is a process or a paragraph, and a conviction weighted PMS brochure answers none of them. . 6 min
  21. Two week rebalancing and the STCG objectionA 60 percent higher short term tax rate loses to a 192 percent higher gross return, so compare after tax cheques on the same corpus rather than tax brackets. . 6 min
  22. The true cost stack of a regular planStated TER, distributor commission and silent churn stack to about 178 basis points a year, and on Rs 10 lakh over five years that is closer to Rs 95,000 than Rs 17,000. . 6 min
  23. Active fund, stripped: what 1.5 percent buysTaking apart a 29 year old active large cap fund shows about 40 percent active share, a direct plan that beats its benchmark by 0.4 points and a regular plan that trails it. . 3 min
  24. PMS 2 and 20: the rupee mathOn a Rs 25 lakh book earning 18 percent gross, a 2 and 20 PMS fee stack with GST and trading drag takes 4.08 points, and the ten year compounding gap is Rs 38 lakh. . 6 min
  25. The mutual fund cost stackA 1.65 percent TER is only the visible line; add churn, cash drag and the regular plan commission and the honest annual cost of an active large cap fund is near 178 basis points. . 6 min

03Go deeper

From the notes to the course, and to the cards.

Compare the strategiesThe free Learn course on the same ground, with a certificate at the end. 18 index algosEvery RupeeCase strategy, model back tested, in your own demat. All eight topicsBack to the hub: reading paths, search and the latest notes.

04Questions, answered with figures

Three questions readers ask about costs: mf, pms, rupeecase.

What does a 1 percent annual fee actually cost?

About a fifth of your ending corpus over 25 years. On Rs 10 lakh at 12 percent gross, a 1.00 percent fee lands at Rs 135.85 lakh instead of Rs 170.00 lakh, and more than half of that gap is charged in the last five years. Read the note: A 1 percent fee does not cost you 1 percent

Direct or regular plan?

Same scheme, same manager, same NAV; the regular plan carries a trail commission of about one point a year on active equity. On Rs 10 lakh over twenty years at 12 percent gross that one point costs Rs 14.5 lakh. Read the note: Direct vs regular: the finder's fee you pay forever

How often do active funds beat the index in India?

Over the ten years to June 2025, SPIVA India shows 73 of 100 active large cap funds, 82 of 100 mid and small cap funds and 87 of 100 ELSS funds trailed their benchmark. Read the note: The base rate of beating the market

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