Monday, August 3, 2009

After the ban on Entry Load , exit load kicks in MF industry

After the SEBI bringing the ban on Entry loads in Mutual Funds which was earlier 2.25% on most Equity oriented Mutual Funds being implemented from 1st August 2009. Most Mutual Fund houses are now bringing in Exit Load to compensate some what for the loss of it.

Recently many Fund houses has announced change in there charge structure. most of them are increasing the tenure of exit load from 1 year to 3 years now with an exit load of 1% being charged if you exit an MF scheme before completion of 3 years.

Many schemes which did not have any exit load at all are incorporating the exit load of 1%.
some MF houses have variable exit load structure like if your withdraw before 1 year exit load is 3% , withdrawal between 1year and 2 year will extract 2% exit load and withdrawal between 2nd and 3rd year exit load is 1% and withdrawal after 3 years no exit load.

All this changes will be implemented on new investments registered after 1st August 2009. Even in case of SIP registered after 1st August 2009 new rules will apply and SIP registered before 1st August 2009 old rules will apply.

Hence many of the people who have enrolled for SIP before 1st August 2009 it is advisable to stop your old SIP and register new SIPs with the same funds.

Get Wealthier and Wiser !

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