What is no exit load in mutual fund

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A No-Load fund is one that does not charge entry or exit load. It means the investors can enter the fund/scheme at NAV and no additional charges are payable on purchase or sale of units.

A Load Fund charges a percentage of NAV for entry or exit into the fund. The load structure of a scheme has to be disclosed in its offer documents. In accordance with the SEBI circular SEBI/IMD/CIR No.4/168230/09 dated 30 June 2009, there is no entry load for any/all mutual fund schemes.

Exit load is generally charged if the exit is made before a specified time. In most equity funds, the exit load is 1% if the exit is before 1 year. Assuming you bought the fund at a NAV of Rs.10, and after 6 months the NAV is Rs.11 and you wish to exit from the fund, you will be charged 1% of 11 = 0.11 and your redemption proceeds would be Rs.10.89 (Rs.11- Rs.0.11).

Currently, in India, the exit load charged is credited to the scheme. Investors should consider loads while making investments as these affect their returns. However, investors should also consider the performance track-record of accomplishment and service standards.

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What is no exit load in mutual fund?