Entry load in the guise of transaction charge for subscription
Sebi has said that distributors will now be allowed to charge Rs 100 per subscription for investments below Rs 10,000. A first-time mutual fund investor will have to pay Rs 150.
Impact:
Entry Loads
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Sebi bans differential exit loads
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Sebi has issued a new circular to all mutual funds, barely a week after its rule banning entry loads came into effect. The capital market regulator has told mutual funds to charge exit loads uniformly to all investors. The move plugs any possibility of mutual funds compensating for the lack of entry loads by recovering expenses from retail investors, when they exit a scheme.
Filed under: Economy+Policy, Top News, Entry Loads, Exit Loads, Markets Stock Markets, Mutual Funds
Entry load out from Jan 4, will investors go the extra mile?
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Sebi has stuck to its word and banned the entry load on direct investments in mutual funds (without going through an agent/broker/collecting bank). It’s a welcome step as it instantly adds about 2% more to the capital invested by an investor, and hence the overall returns go up significantly in the longer run.