Which mutual funds have zero exit load? (2023)

Do all mutual funds have exit load?

An exit load refers to the fee that the Asset Management Companies (AMCs) charge investors at the time of exiting or redeeming their fund units. It is also referred to as the commission to fund houses or exit penalty if an investor exits the fund in the lock-in period. Not all funds levy an exit charge.

Exit load: Exit load is charged at the time an investor redeems the units of a mutual fund. The exit load is deducted from the prevailing NAV at the time of redemption. For instance, if the NAV is RS 100and an exit load is 1%, the redemption price would be Rs. 99 per unit.

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.

Index funds and ETFs based on broad-based market indices that follow a passive strategy are also considered to be low risk as they mimic well-diversified market indices. Focused funds, sectoral funds, and thematic funds are at the other end of the risk spectrum because they hold concentrated portfolios.

Some of the mutual fund houses in India who offer no load funds are - TATA Contra, Quantum Long Term Equity Fund, JM Nifty Plus, HDFC Index Sensex Plus, Edelweiss Diversified Growth Equity Fund, DWS Alpha Equity and DWS Investment Opportunity.

The graded exit load ranges from 0.0070% (day 1) to 0.0045% (day 6).

Suppose a scheme charges 1% exit load for redemptions within 365 days from the date of purchase. Suppose you redeem 500 units of a scheme 4 months after your date of purchase. Let us assume that the NAV is Rs 100. The exit load will be = 1% X 500 (number of units) X 100 (NAV) = Rs 500.

Exit Loads on Various Types of Mutual Funds

Debt funds may or may not have an exit load. However, one can ignore the expense by adjusting the investment tenure with the time period for which the fund charges an exit load. Same with equity funds. It varies but is usually around 1% if redeemed within the first 12 months.

What are Liquid Funds. Liquid funds are debt funds that invest in fixed-income securities such as certificates of deposit, treasury bills, commercial papers, and other debt securities that mature within 91 days. Liquid funds do not come with a lock-in period.

How do you buy no load mutual funds?

Investors can choose to purchase units in no-load or load mutual funds. No-load mutual funds have no or low fees while load funds have a sales charge or commission attached. You can purchase no-load funds directly from the company or through a brokerage firm but load funds are sold through an adviser.

Money market mutual funds = lowest returns, lowest risk

They are considered one of the safest investments you can make. Money market funds are used by investors who want to protect their retirement savings but still earn some interest — often between 1% and 3% a year.

For example, certificates of deposit (CDs), money market accounts, municipal bonds and Treasury Inflation-Protected Securities (TIPS) are among the safest types of investments.

Having said this, in the history of mutual funds, there has never been a time when the value of a fund portfolio has dropped to zero (at least not that I know of).

Types of Loads in Mutual Funds:

Entry Load: This is a charge or commission given by the investor at the time of the initial stage of investment purchase to the mutual fund company. The entry load is usually deducted from the investment amount, reducing the quantum of investment.

While these funds do not charge a front or backload sales fee, they may make it up by charging other fees. 2 The best way to determine the charges is by reading the fund's prospectus. The management firm will pay any charges based on the fund's daily net asset value (NAV) from the no-load mutual fund's assets.

Understanding a No-Load Fund

For example, if an investor purchases $10,000 worth of a no-load mutual fund, all $10,000 will be invested into the fund. On the other hand, if the person buys a load fund that charges a front-end load (sales commission) of 5%, the amount invested in the fund is only $9,500.

How much is exit load in SBI mutual fund?

0.50% - For exiting within 15 days from allotment date.

Exit Load. SBI Blue Chip Fund - Regular Plan - Growth charges 1.0% of sell value; if fund sold before 365 days.

A good reason to stop your Systematic Investment Plan or redeem an investment would be if you have achieved your financial goal. In fact, in the case of longer-term goals, the exit plan often starts even before you have reached your investment goal.

Exit Load. Mirae Asset Emerging Bluechip Fund - Growth charges 1.0% of sell value; if fund sold before 365 days. There are no other charges.

Exit load on SIP is same as all the other mutual funds. Each SIP installment must complete a period of 12 months in order to escape the exit load for that particular. For instance, if you have done a SIP for 3 years, you will have to wait for 1 more year if you do not plan to pay the exit load.

A fund house can alter the exit load from time to time. The exit load applicable on the date of allotment of units is applicable to those specific units.

For instance, with equity-oriented mutual funds, if you withdraw your investments within 1 year of purchasing, the profits generated will be subject to short-term capital gains tax at 15%. In the case of long-term gains beyond Rs. 1 Lakh, the tax rate is 10%.

These funds invest in money market instruments like certificates of deposit, commercial papers, treasury bills, call money, among others. Liquid funds are liquid in nature and carry low risk. Most liquid funds do not have any exit load. That means, investors can exit these schemes anytime without paying any penalty.

The Parag Parikh Flexi Cap Fund Direct Growth is rated Very High risk. Minimum SIP Investment is set to 1000. Minimum Lumpsum Investment is 1000. For units above 10% of the investment, exit load of 2% if redeemed within 365 days and 1% if redeemed after 365 days but on or before 730 days.

You can also choose to either withdraw just the capital gains on your investment or a fixed amount. This way, you will not only have your money still invested in the scheme, but you will also be able to access regular income and returns.

When should you not invest in mutual funds?

The minimum tenure for investment in Mutual Funds is a day and the maximum tenure is 'perpetual'.

An investment in an open end scheme can be redeemed at any time. Unless it is an investment in an Equity Linked Savings Scheme (ELSS), wherein there is a lock-in of 3 years from date of investment, there are no restrictions on investment redemption.

The main disadvantage of a no-load fund is the lack of professional advice and guidance. You are responsible for processing the transaction, including analyzing and comparing the available options.

At the same time, almost all Vanguard mutual funds have no load. That means the fund doesn't charge investors when fund shares are being bought or when fund shares are being sold. Again, this helps more capital to remain invested in the market, which undeniably is a major boon for investors.

One may invest in mutual funds DIRECTLY i.e., without involving or routing the investment through any distributor/agent in a 'Direct Plan'. OR one may choose to invest in mutual funds with the help of a Mutual Fund distributor/agent in what is termed as a 'Regular Plan'.

High-quality bonds and fixed indexed annuities are often considered the safest investments with the highest returns. However, there are many different types of bond funds and annuities, each with risks and rewards. For example, government bonds are generally more stable than corporate bonds based on past performance.

How many mutual funds should I have?

The consensus is that a well-balanced portfolio with approximately 20 to 30 stocks diversifies away the maximum amount of unsystematic risk.

What is the safest investment for seniors? Treasury bills, notes, bonds, and TIPS are some of the safest options. While the typical interest rate for these funds will be lower than those of other investments, they come with very little risk.

Mutual funds that require you to pay a load on purchase are referred to as entry load, while funds that require you to pay a load upon sale are referred to as exit load. Sometimes, an investor can lower the cost by negotiating with the broker to waive off the load.

Load funds are mutual funds that charge a sales fee or commission. No-load funds usually do not charge any sales fee or commission, as long as you keep your money invested for a specified period, often five years.

An investment in an open end scheme can be redeemed at any time. Unless it is an investment in an Equity Linked Savings Scheme (ELSS), wherein there is a lock-in of 3 years from date of investment, there are no restrictions on investment redemption.

There is no best time as such for investing in mutual funds. Individuals can make investments in mutual funds as and when they wish. But it is always better to catch the funds at a lower NAV rather than higher price. It will not only maximise your returns but also lead to higher wealth accumulation.

An overnight Fund is a type of debt mutual fund scheme, which invests in overnight securities having a maturity of 1 business day. As such, their portfolio stays immune from the liquidity risk, since it is not dependent upon the secondary markets to liquidate the investments.

What is a true no load fund?

A no-load fund is a mutual fund in which shares are sold without a commission or sales charge. No-load funds are possible because the shares are distributed directly by the investment company, instead of going through a secondary party.

The main disadvantage of a no-load fund is the lack of professional advice and guidance. You are responsible for processing the transaction, including analyzing and comparing the available options.