Entry Loads

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Sebi bans differential exit loads

Sebi has issued a new circular to all mutual funds, barely a week after its rule banning entry loads came into effect. The capital market regulator has told mutual funds to charge exit loads uniformly to all investors. The move plugs any possibility of mutual funds compensating for the lack of entry loads by recovering expenses from retail investors, when they exit a scheme.

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Entry load out from Jan 4, will investors go the extra mile?

Sebi has stuck to its word and banned the entry load on direct investments in mutual funds (without going through an agent/broker/collecting bank). It’s a welcome step as it instantly adds about 2% more to the capital invested by an investor, and hence the overall returns go up significantly in the longer run.

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