List of Top Mutual Funds with Low Expense Ratio (2026)

Expense ratios directly affect net returns, especially over long holding periods. In India, several passive and low-cost mutual funds now operate with expense ratios well below 0.30%, compared to 1%–2% for many actively managed schemes. As industry assets cross ₹80 lakh crore, cost efficiency has become a measurable differentiator in fund selection.

Best Lower Expense Ratio Mutual Funds

Note: The list of top mutual funds with the lowest expense ratios is derived from Tickertape Mutual Fund Screener, and the data is from 1st February 2026. The funds on the low-expense ratio MF list were chosen according to the following criteria:

• Plan: Growth
• Category: Equity
• CAGR 3Y: High
• Expense Ratio: Low
• AUM: Sorted from highest to lowest

🚀 Pro Tip: You can use Tickertape’s Mutual Fund Screener to research and evaluate funds with over 50+ pre-loaded filters and parameters.

Overview of the Top Lower Expense Ratio Mutual Funds

Kotak Midcap Fund

Kotak Midcap Fund is an equity mutual fund that invests primarily in mid-cap companies ranked between 101-250 by market capitalisation. The fund seeks capital appreciation by investing in medium-sized companies with growth potential, accepting higher volatility compared to large-cap low risk mutual funds India.

Tata Small Cap Fund

Tata Small Cap Fund is an equity mutual fund that invests predominantly in small-cap stocks ranked beyond the top 250 companies by market capitalisation. The fund targets long-term wealth creation through exposure to smaller, emerging businesses while accepting significantly higher risk and volatility.

SBI Gold

SBI Gold is a commodity fund that invests in physical gold and gold-related instruments, providing investors with exposure to gold price movements. The fund offers an alternative to holding physical gold, eliminating storage concerns while tracking domestic gold prices denominated in rupees.

Nippon India Multi Asset Allocation Fund

Nippon India Multi Asset Allocation Fund is a multi-asset fund that invests across at least three asset classes, including equity, debt, and commodities like gold. The fund aims to provide diversification benefits by spreading investments across different asset categories with varying risk-return profiles.

ICICI Pru Thematic Advantage Fund

ICICI Pru Thematic Advantage Fund is an equity scheme that invests based on identified investment themes, sectors, or market opportunities. The fund follows a thematic approach, concentrating on specific economic trends or sectors the fund manager believes will outperform over time.

HDFC Gold ETF FoF

HDFC Gold ETF FoF is a fund of funds that invests in gold exchange-traded funds, providing indirect exposure to gold prices. The scheme offers a convenient way to invest in gold ETFs without requiring a demat account, tracking domestic gold price movements.

ICICI Pru Nifty Next 50 Index Fund

ICICI Pru Nifty Next 50 Index Fund is an index fund that tracks the Nifty Next 50 Index, comprising 50 companies ranked immediately after the Nifty 50. The fund provides exposure to potentially emerging large-caps through a passive investment strategy.

Motilal Oswal Nasdaq 100 FOF

Motilal Oswal Nasdaq 100 FOF is a fund of funds that invests in units of Motilal Oswal Nasdaq 100 ETF, providing exposure to 100 largest non-financial companies listed on the Nasdaq stock exchange. The fund offers access to leading US technology and innovation-driven companies.

UTI Nifty Next 50 Index Fund

UTI Nifty Next 50 Index Fund is an index fund that passively tracks the Nifty Next 50 Index, investing in 50 companies positioned just below the Nifty 50 constituents. The fund offers diversified exposure to potential future large-cap leaders through low-cost index replication.

ICICI Pru Silver ETF FOF

ICICI Pru Silver ETF FOF is a fund of funds that invests in silver exchange-traded funds, offering exposure to silver price movements. The scheme provides an alternative precious metal investment option without physical storage requirements, tracking domestic silver prices denominated in rupees.

What is the Expense Ratio in Mutual Funds?

The expense ratio refers to the fee charged by a fund. Under SEBI (Mutual Funds) Regulations, 1996, low risk mutual funds India can charge operating expenses as a percentage of daily net assets. These expenses include sales and marketing, administrative, transaction costs, investment management fees, registrar fees, custodian fees, and audit fees. Thus, this collective expense is referred to as the Total Expense Ratio (TER).

The expense ratio varies based on the type of fund. For instance, equity mutual funds in India tend to have higher expense ratios than debt funds. Further, in terms of the nature of the fund, actively managed low risk mutual funds India usually come with higher costs than passively managed funds. 

How to Invest in Lowest Expense Ratio Mutual Funds?

Investing in the best mutual funds in India with a less expense ratio can be a strategic financial move, as it can help you keep more of your returns. 

1. You can start by researching mutual funds with less expense ratio by using online tools like Tickertape Mutual Fund Screener. 
2. Once you have selected the low-cost SIP mutual funds based on different metrics and parameters, go to smallcase.com or the smallcase app, and login via your phone number. 
3. Click on ‘Discover‘ and enter the name of the specific mutual fund in the search bar and hit enter. You can click on ‘invest now’ and select whether you want to invest a lump sum amount or start a SIP and start investing!

Here are a few popular smallcases among new investors:

Benefits of Investing in Low Expense Ratio Mutual Funds

• Higher Net Returns: Low expense ratio funds let you keep more of what you earn. Minimal fees mean more of your fund’s growth goes directly into building your wealth over time.
• Better Compounding Benefits: Compounding works best when you minimize costs. The best low-cost mutual funds help you maximize reinvested earnings, which translates to stronger long-term growth.
• Reduced Cost Burden: High expense ratios eat into your returns—especially with actively managed funds. Low-cost index funds and tax-efficient options ensure management fees don’t outweigh the value you get from professional expertise.

How to Choose a Low Expense Ratio Mutual Fund?

With Tickertape MF Screener, you can conduct an expense ratio comparison with the list of top funds with the lowest expense ratio in no time. 

• First, add an ‘Expense Ratio’ filter to the list and sort it from low to high. Apart from this, you can add over 50+ filters based on your preferred criteria to get a list according to your preferred criteria and goals.
• Once you’ve shortlisted the top funds from the screener results, you can learn more about the low expense ratio fund performance, returns, peers, and other metrics by heading to the individual Mutual Fund Pages on Tickertape.
• Additionally, you can also monitor your investment portfolio and get real-time updates about the same.

Who Should Explore Low Expense Ratio Mutual Funds?

• Cost-Conscious Investors: Want to cut down on recurring management charges? Low expense ratio funds, including the best low-fee equity funds 2025, help you minimize costs and keep more potential gains.
• Long-Term Wealth Builders: Planning for retirement or your children’s education? The top low-cost mutual funds, including low-expense ratio growth funds, give you an edge because reduced expenses compound positively over extended periods.
• Passive Investment Seekers: Prefer index funds or ETFs that follow a passive strategy? Low expense ratio mutual funds align well with tracking market benchmarks efficiently.
• First-Time Mutual Fund Investors: New to mutual funds? Low-cost options help you build experience without high management fees weighing you down.
• High-Volume Investors: Investing substantial amounts? Pay attention to expense ratios—even small percentage differences create significant impact on returns when you’re working with higher capital.

Types of Costs Involved in Buying or Selling Mutual Funds

Here are the costs you should consider:

• Exit Load: Exit before the set period, and you’ll pay an exit load—typically 6 months for debt funds and 1 year for equity funds. This ensures exiting investors don’t burden those who stay invested.
• Expense Ratio: This annual fee covers administrative and operational costs for managing your fund. It directly cuts into your returns.
• Securities Transaction Tax (STT): Equity funds attract STT, but debt funds don’t. When you redeem equity funds, you pay STT on the sale amount.

Taxation on Lowest Expense Ratio Mutual Funds 

Equity Mutual Funds

1. Tax-Free Limit: The capital gains up to  ₹1.25 lakh per year are tax-free. This is an increase from the previous limit of  ₹1 lakh.
2. Tax Rate: The gains exceeding  ₹1.25 lakh are now taxed at a flat rate of 12.5%. This is an increase from the previous rate of 10%.
3. Indexation: The benefit of indexation, which allowed investors to adjust the purchase price for inflation, has been removed for all asset classes, including equity mutual funds.

Debt Mutual Funds

• No Indexation Benefit: The previous benefit of adjusting the purchase price for inflation is removed. Now, the entire gain after three years is taxable at 12.5%.
• Change in Holding Period for Specified Mutual Funds: Previously, debt mutual funds, including long duration funds, with a holding period of over 36 months were taxed based on the investor’s tax slab, classified as Long-Term Capital Gains (LTCG). Now, for specified mutual funds where over 65% of the investment is in debt, the holding period for taxation has been reduced to over 24 months. These low-expense ratio large-cap funds will still be taxed according to the investor’s tax slab as either LTCG or STCG.

Hybrid Mutual Funds

Note: Mutual fund schemes where neither the equity nor debt orientation exceeds 65% will now be classified as long-term investments after 24 months. The previous holding period for these funds was 36 months. These will be taxed at the revised LTCG tax rate of 12.5%.

Risks of Investing in Lowest Expense Ratio Mutual Funds

Lowest expense ratio mutual funds attract investors with their cost-efficiency, but you need to understand the potential risks:

• Concentration Risk: Some of the lowest expense ratio mutual funds, including index funds with lowest expense ratios, concentrate their portfolios heavily. When a fund invests heavily in just a few sectors or stocks, underperformance in those areas increases your risk.
• Lack of Active Management: Many low-cost funds for cost-conscious investors use passive management. This cuts costs but removes active stock selection and market timing by fund managers. Market or index underperformance becomes your risk, even with top low risk high return mutual funds in India.
• Tracking Error: Tracking error measures how a scheme’s actual returns deviate from its benchmark. These errors might seem small, but they can hurt your returns. Even slight variations can impact your investment corpus.

To Wrap It Up…

When it comes to investing in mutual funds, the expense ratio is a critical factor that can significantly impact long-term returns. While the expense ratio is undoubtedly an important metric, investors should also consider factors such as the fund’s track record, investment strategy, level of diversification, and how well it aligns with their overall financial objectives and risk appetite. However, it is advisable to do thorough market research on your own and/or consult a financial advisor before investing.

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Frequently Asked Questions (FAQs) on Low Expense Ratio Mutual Funds