7 day exit load to be applicable on Liquid Funds. Here's the impact on returns

SEBI had recently announced a 7day graded exit load period for all liquid funds, given the credit issues. Here’s how much of an exit load will be applied and the impact on returns.

Exit Day NAV before exit load exit load NAV after exit load Return after exit load (% p.a.) Impact on Returns (% p.a.)
Day 1 100.0151 0.0070% 100.0081 2.90% -2.56%
Day 2 100.0301 0.0065% 100.0236 4.30% -1.19%
Day 3 100.0452 0.0060% 100.0392 4.80% -0.73%
Day 4 100.0603 0.0055% 100.0548 5.00% -0.50%
Day 5 100.0753 0.0050% 100.0703 5.10% -0.37%
Day 6 100.0904 0.0045% 100.0859 5.20% -0.28%
Day 7 100.0151 Nil 100.0151 5.50% Nil

Note: Assuming an NAV of Rs. 100 and a scheme return of 5.5% p.a. , the following would be the impact on liquid fund returns for investors redeeming their funds before 7 days:
Source: ICICI Mutual Fund

What are the other alternatives to liquid funds without any exit load?

You can invest in an Overnight Fund. These funds can only invest in securities with maturities of 1 day. This means that there is practically no interest rate risk. Overnight funds predominantly invest only in an instrument called Triparty Repo (TREPS) through CCIL which acts as a counterparty to all trades. Which means there is no default risk.

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Very Informative, Thanks!
But explain what happens to exit load. Will that be pocketed by the mf or just added to the fund’s asset size/value.
if yes, investor holding more than 7 day will be benefited by this.

Exit load proceeds are pooled back to the fund and are distributed to existing investors.

Are there any “Overnight Funds” with instant redemption facility.

Instant redemption is available only in liquid funds. For overnight funds the settlement cycle is T+1.

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What will be its implication on me, if I buy and sell liquidbees within two days?

This is only for Liquid mutual funds. No impact on Liquid ETFs.

Sir, how much time it takes for insta-redemption? Are there any cut-off timings? Do all liquid funds have this facility?

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pls suggest / give examples of a few overnight funds !!!

Already answered on the forum! Or you can go to Coin and search!!!