As I know, various ETFs charge some expense ratio (fund management fee), but if I purchase the ETF units from Zerodha (i.e. Purchased or traded on secondary markets), is any expense ratio charged ? or how to figure out if it has been already charged to me ? My trading / investing horizon can be intraday or few weeks or even years.
The price at which you purchase is inclusive of expense ratio. This is not charged by Z or any other broker.
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Thank you rj07
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Broadly speaking an ETF is like a mutual which trades on the exchanges. Expense ratio and trading costs are two different things.
Expense ratio is charged by the issuer (asset management company) Even ETFs have an NAV. It is nothing but the total assets of the fund - liabilities/number of units. Every day when an asset management company declares the NAV, the expense ratio would have already been deducted.
By the way, the price you see on your trading platform is the market price, NAV is different from that. To check the NAV you will have to vist the respective AMC’s website. Here’s an example of Motilal ETFs:
Trading costs are what you incur when you are buying an selling through a broker.
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Hey where can u track live inav for motilal oswal etfs??
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Generally its available on MF website. Ticker which Bhuvan used is available on Motilal oswal home page.
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Can you please explain in simpler terms?
Like if I hold 500 Quantity of NIFTYBEES for more than 1 year, then how expense ratios fees are going to be deducted.
Who deducts those fees charges does Zerodha do it or I have go somewhere and pay it.
Or when I sell it all the Expense ratios fees will be accumulated and paid at once like a mutual fund.
Don’t redirect this question that it has been answered here or there, just make it clear, I didn’t find any.
NAV is published by mutual fund after deducting expense ratio. Investor does not have to do anything in it.
In very simpler terms, assume you invested at NAV of 10, fund earned 10% on it so NAV should be 11. But fund also has expense ratio of 1%. So fund will publish its NAV as 10.9 (after subtracting 1% expense). This happens on daily basis for NAV.
So investor does not have to do anything. You can invest, and whenever you decide to exit, you will be paid that day’s NAV.
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At the end of each trading day, the expense ratio is deducted. After deducting the expense ratio, the AMC will declare the revised NAV.
The expense ratio is charged by the AMC, not Zerodha.
You are referring to exit load, Exit load and expense ratio are two different charges. NIFTYBEES, there is no exit load. Click here to learn more.
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That’s 10.9 not 10.99
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My bad, I just calculated it on returns. Corrected now 
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ETFs do have certain expense ratio, which is quite low when compared to mutual funds as the ETF products follow passive indexes which are not actively managed. The expense ratio is charged by the managing company and not by the broker. When you place the order for the ETF, the broker charges brokerage and not expense ration. The expense ratio is deducted from your invested amount everyday by the AMC. The NAV which you see has already factored in the expense ratio, you need not pay anything extra on top of it. When selling the units you will get a price for the units usually close to the NAV and once sold you will get the money credited.