InvestmentFinancial Glossary
Load (Mutual Fund)
Definition
A fee charged by a mutual fund at the time of purchase (entry load) or redemption (exit load). SEBI abolished entry loads in 2009. Exit loads — typically 1% if redeemed within 12 months — still apply to most equity funds. Liquid funds and some other categories have shorter or no exit load periods.
Why It Matters
Exit loads are designed to discourage short-term trading. On a Rs 5 lakh investment, a 1% exit load costs Rs 5,000. Always check the exit load structure before investing — some funds have exit loads for 2-3 years. For emergency funds, choose liquid funds with zero or negligible exit loads.