SEBI Mutual Fund Expense Ratio Changes 2025: A Year That Reset MF Costs

The mutual fund industry in India saw very strong growth in 2025, with total assets under management (AUM) reaching around Rs 80 lakh crore, up sharply from 2024

 Fees get clearer
Mutual fund costs are now easier to understand, with a clear split between management fees and statutory charges.

Expense ratios come down
Lower caps on costs — especially in passive schemes — help investors retain more of their returns over time.

Passive funds finally cheaper
Index funds are now priced closer to their true passive nature, reducing the cost gap with direct investing.

Brokerage costs capped
Limits on brokerage charges ensure less money leaks from investor portfolios.

No hidden exit load recovery
Removal of indirect cost recovery improves fairness when investors enter or exit schemes.

Rajani Tandale, Senior Vice President – Mutual Fund, 1 Finance
“SEBI’s move to clearly separate statutory levies from core fund management costs brings much-needed transparency. Lower expense ratios, especially in passive funds, can meaningfully improve long-term returns for investors.”

Neha Chhabra, Assistant Vice President, Avisa Wealth Creators
“The mutual fund industry is moving from pure growth to strategic maturity. Fee transparency, AI-led operations, and the rise of hybrid and active ETFs are reshaping how investors build portfolios.”

 New products, wider exposure
Active ETFs, multi-asset hybrid funds, and easier global investing via GIFT City are giving investors more choice with better risk balance.

More personalised investing
Automation allows fund houses to offer tailored portfolios at scale, rather than one-size-fits-all solutions.

AI reshapes fund management
AMCs are using AI for portfolio rebalancing, risk tracking, and faster decision-making — improving efficiency behind the scenes.