No entry load on direct Mutual Fund applications
The growth of mutual fund industry in the past years and the technology available for investments has enabled investors to take informed decisions and to invest in mutual funds through internet and other modes without availing of services of distributors/ agents/ brokers. At present irrespective of the mode of entry, investors are required to pay the entry load.
With effect from January 04, 2008, investors making applications for investments in Mutual Fund schemes directly without routing through any distributor/agent/broker i.e. through internet, submitted to AMC or collection centre/ Investor Service Centre would not be subject to entry load.
This waiver shall also apply to to additional purchases done directly by the investor under the same folio and switch-in to a scheme from other schemes if such a transaction is done directly by the investor.
Till now the AMCs was charging as high as 2.25% entry load on MF Schemes for meeting distribution and selling expenses.
For instance, till now if an investor invests Rs 100,000 in an mutual fund scheme carrying an entry load of 2.00% then Rs 2000 would be deducted and Rs 98000 would be invested in the stocks. Now with the entry load exemption the investors can have units for full Rs 100,000.
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