Gross Return
The portfolio's raw return before costs — what the fund manager actually produced, and the only number marketing likes to show.
Why you care
Gross return is what the portfolio earned before the fund took its cut: the raw performance of the stocks and bonds the manager picked. It's a real measure of skill, but it's not your return. Every fee still has to come out of it, and the fund's own marketing quietly prefers to talk in gross.
Run the numbers
A fund's holdings gain 12% over the year (illustrative). That's the gross return — the number that looks good on a factsheet. But the fund charged 1.75% to run the money, so 12% is not what reached your NAV. The gap between this number and what you kept is the whole reason cost matters.
Where this goes
Gross return is the starting point of the spine. Subtract the fund's TER and you get your net return after TER — the honest number the rest of this map points at. Gross flatters the manager; net is what pays for your goals.
Why you care
Gross return is the return a fund's portfolio generates before any costs are deducted: pure investment performance, the manager's actual output. If the underlying shares and bonds gained 12% over a year, the gross return is 12%, full stop.
It matters for one reason: it's the number the industry likes to lead with, and it's not the number you get. Gross return measures the manager; your outcome is measured after the fund has been paid. The two can diverge by a lot over time, and the divergence is exactly the TER. A reader who judges funds on gross (or on a headline "the fund returned X") is judging the manager's stock-picking, not their own likely result. That's a fine thing to study, but it answers a different question from "what will I keep."
Run the numbers
A fund reports that its portfolio returned 12% gross over the year (illustrative). On ₹10 lakh, that's a ₹1.2 lakh gain on paper. But the fund runs at a 1.75% TER, deducted daily from NAV. So the return that actually showed up in your units was closer to 12% − 1.75% = 10.25%, or about ₹1.02 lakh. The ₹18,000 difference didn't vanish into the market; it was the cost of owning the fund. Gross tells you how good the engine is. It does not tell you how far the car went once you paid for fuel.
Where this goes
Gross return feeds one place: subtract cost and you get the net return after TER, the spine number of this entire vertical. Everything on the cost side of the map exists to explain the size of that subtraction. Everything on the judgement side exists to check whether the manager's gross return was actually worth the fee.