I started my investment journey back in may start, and invested rather randomly without any thoughts. As I came to realise that, I wished to withdraw that amount and invest somewhere else after proper research. I found that it’ll subject me to exit load (at least for the fund of concern). That’s fine as I invested very less amount, but I wanted to clarify some doubts.
The following is specified in the final statement:
Axis Small Cap Fund - Direct IDCW Payout(SC-D1) : Entry Load - NIL, Exit Load - NIL,Scheme re-opens on: November 29, 2018 (after 5 years, on conversion to an open ended scheme) w.ef., 29/11/2013 Exit Load: If redeemed / switched-out within 12 months
from the date of allotment:For 10% of investments: NIL on FIFO basis For remaining investments: 1% w.e.f., 29/11/2018
These are my understandings from this:
- There is no charge for starting investment in this scheme.
- If I redeem after 1 year of my investment, there is also no charge.
- If I redeem before, then there can be charges.
Let’s say I invested ₹1000/- (for simplicity, I’m assuming this is after stamp duty - if this assumption creates issues, let me know) on May 1, and it’s current value is ₹1050/-.
- If I redeem up to ₹100/-, there will be no charge.
- If I redeem more than ₹100/-, say for example ₹500/-, I have to pay charge of 1%, i.e. ₹5/-, and ₹495/- will be credited to my bank. (Another possibility is the charge of 1% is only for above ₹100, so I need to pay charge of ₹4/- instead of ₹5/-, let me know if that’s the case)
Please let me know whether these are correct or not. These are two points that I can think right now:
- I assumed ₹1000/- as both gross and net investment, essentially ignoring the stamp duty. That may have some role.
- For the redemption charges, there can be two other possibilities.
- The charge is applicable only on the gain and not on the primary investment. So charge will be calculated on ₹25/- (current value of ₹500/-) and not ₹500/-. But I don’t think it’s the case.
- Another more likely possibility is that the charge is calculated only on the amount above ₹100/-. So it’ll be calculated on ₹400/- instead of ₹500/-, similar to income tax calculation.
The context of my asking this is in the statement, I don’t see any deduction for exit load, but a charge of 0.001% as STT. This is unexpected to me, and that’s why I want to understand how exactly it’s calculated.
PS. Probably this is not the right question, but I want to know whether the charges is calculated same way for all mutual funds or not. Rates may vary, even be zero, is the calculation same?