How does an AMC calculate exit load and do all mutual funds have exit loads?

I had invested Rs 10000 in DSP Black Rock Mid-Cap Fund at the NAV of 42.39 and received 235.904 units in December. I then sold the units at 30th March at the NAV of 50.22 and received a credit of Rs 11,728.910 whereas I should have got a credit of Rs11847.098.
Has the AMC charged an exit load? If yes, then where do I check for the same?

The fund in which you had invested is a equity fund. There are generally 3 categories of funds : 1) Equity funds, 2) Debt Funds and 3) Liquid Funds. Most of the equity funds have an exit load of 1% till 365 days. It means that if you redeem the units within 365 days from the date of allotment then a charge of 1% will be levied on redeeming the units. Liquid funds generally do not have an exit load and the condition/rate of the exit load varies for different types of debt funds.

You can confirm if the scheme has an exit load by verifying the same in the scheme information document (SID). You can click on the link as shown in the screenshot (available on the fund page on COIN) which will redirect you to the AMC website from where you can download the SID.

In the SID, search for exit load and you would see the details as shown in the screenshot.

Hence, there is an exit load of 1% if redeemed before 365 days of allotment. Now, the AMC calculates the redemption amount (after levying exit load) as follows :

235.904 x [ 50.22 - (1% of 50.22)] = 235.904 x 49.719 = Rs 11,728.91 which is the amount that you received.

If you ever wish to check the value of NAV after the application of exit load, then you can verify the same from the AMFI wibsite. You can check the historical NAV of any fund on the website. If you check the historical NAV of this fund on the AMFI website then you would see the foolwing information.

AMFI will always release 2 prices (in case there is an exit load ) : 1) Repurchase Price & 2) Sale price.

The former shows the reflects the NAV after the exit load has been levied and the latter is the price without the exit load which is usually the NAV at which you would receive the allotment of the units had you placed a purchase order on 30th March before the cut-off time.

3 Likes

Not all funds have same terms for exit loads. Most index fund have no exit load after 7 days like SBI Nifty Index fund. Another fund Principal Midcap Index fund has no exit load after 90 days.

Yes thats right, but the terms of exit load for any fund can be amended and the same will then be mentioned in the Statement of Additional Information (SAI for the particular scheme.

How will exit load be applicable on SIP Mutual fund with 1% exit load for 12 months?

Suppose i invested for 18 months and i just want to redeem first 3 month units?? in that case will exit load be applicable??

how does exit load work in SIP mutual fund?

1 Like

The exit load will be applicable on units from each date of allotment. Suppose, you invested same amount on a monthly basis in January and received 100 units, February and received 105 units, March and received 110 units then the exit load of 1% upto 12 months is calculated separately for 100 units, 105 units and 110 units.

Say I believe I am investing in a fund for which there is another better alternative. I dont want to cancel my SIP in this fund now as the exit load term is another 6 months away. So what if I do not invest a penny more in this fund and cancel the SIP for redemption after the exit load period gets over in 6 months? What is the best thing to do in this situation?

I have a doubt here, in case of some index funds,exit load is nil after seven days.
What does this mean? Seven calendar days or seven business days?

It is calculated on the basis of calendar days.

The exit load is calculated from each date of investment. So, if you are doing a monthly SIP for 6 months then the exit load would be calculated from each date of allotment of that particular month.

So suppose i invest in any fund in SIP form for 10 years and i try to withdraw after that that then also i have to pay the Exit load?