How is the expense ratio calculated?

Expense ratio is generally calculated as a percentage of the fund’s average assets under management (AUM) and is deducted from the investment annually.
For example, if you invest Rs. 10,000 in a fund with an expense ratio of 1%, you will pay Rs. 100 annually as the expense for managing the fund.
The expense ratio is not something you pay separately – it's already factored into your fund’s performance and deducted directly from the fund’s returns.