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No loads for direct application to Mutual fund schemes

September 5th, 2007

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India’s stock market regulator, the Securities and Exchange Board of India (Sebi), has proposed changes to mutual fund fees that would make it cheaper for investors to own them, depending on who they bought it through. Rachna Monga from Mint has this detailed reportIf Sebi has its way, investors could walk into the office of a mutual fund firm, buy any of its funds and walk out without paying any kind of entry fee (or entry load as companies term this).

As of now there is no incentive for investors to do so as the mutual fund firm charges an entry fee from all investors, irrespective of whether their purchase is direct or routed through a distributor. The entry fee ranges from 2-2.25% of the amount invested and is charged by equity funds. Mutual fund companies waive the charge only for large investors who invest more than Rs5 crore.

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