Mutual fund companies

The main business model of mutual fund companies revolves around fees.

They earn money by charging a small fee from investors. This fee is called expense ratio.

Investors need not pay it separately. It is a part of every mutual fund and is automatically deducted.

The mutual fund returns you see and get is after the deduction happens.

So whatever returns you are seeing are final — you are getting the returns you are seeing.

This is how mutual fund company’s interests are aligned with investors' interests — the higher the returns the investor gets, the higher their earnings.