photo by coloros

In January 2008 SEBI abolished entry load on Indian equity funds if you’re investing directly. However, it is mandatory to pay an entry load of 2.25 percent if you transact through intermediaries, better known as distributors who take this charge to service investors.

Suppose you are investing Rs 1000 and the NAV (net asset value) of the scheme that you are buying is Rs 10. This NAV is multiplied by 1.0225 (2.25 percent of Rs 10) to factor in the entry load and operative NAV for you becomes Rs 10.225 (Rs 10 as the actual NAV and Rs 0.225 as the entry load). [Read more]

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Entry loads have been waived off on applications that are submitted directly to the mutual fund house. For MF investors, who invest either by way of SIP (Systematic Investment Plan) or as bulk investing, it could mean saving quite a sum of money – around 2% of the investment amount. So consider investing directly in ELSS (Equity Linked Savings Scheme) as it could be a smart and cost-effective way to do so. If you don’t have the money, churn the existing ELSS portfolio – as entry loads are not applicable for direct investing. [Read more]

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