Exit load is a fee charged when you redeem your investments from a mutual fund. Mutual fund houses charge an exit load on certain mutual funds if you redeem before a stipulated period. For most mutual funds, exit load is charged only for a specified duration after which there is no exit load.
Exit load is charged by fund houses to discourage investors from hopping in and out of schemes. Different mutual fund schemes have different periods in which they levy exit loads.
But many mutual fund schemes do not charge any exit load, especially the debt mutual funds. Let us look into some of the debt funds without any exit load.
Criteria: We have picked top five funds from equity and debt fund categories each, which have the lowest exit load.
Disclaimer: This is not an exhaustive list of mutual funds with zero exit load. There might be other mutual funds which may also have minimal to zero exit load from debt fund or equity fund categories. This is also not a recommendation that the exit load should be criteria before picking mutual funds for investment. The blog is only for informative purposes.
Top Funds with No Exit Load
Whenever you decide to sell the units of mutual funds you own, an exit load may or may not be charged to you.
Here is the list of mutual funds with zero exit load.
|Debt funds with zero exit load|
|Aditya Birla Sun Life Liquid Fund|
|Axis Liquid Fund|
|Baroda Pioneer Liquid Fund|
|BNP Paribas Liquid Fund|
|BOI Axa Liquid Fund|
|Source: Value Research|
|As on November 19|
Liquid funds are the most popular category as debt funds with zero exit load.
- Aditya Birla Sun Life Liquid Fund
The exit load for this fund is less than 0.007% for the first six days from the date of allotment—it is nil after that. The fund was launched in January 2013. The benchmark index of the fund is Crisil Liquid Fund Index.
- Axis Liquid Fund
The exit load for this fund is less than 0.007% for the first six days from the date of allotment. It is nil after that. The fund was launched in October 2009. The benchmark of the fund is Nifty Liquid Index
- Baroda Liquid Fund
The exit load of this fund is nil. Baroda Liquid Fund was launched in February 2009. The benchmark of this fund is Crisil Liquid Index.
- BNP Paribas Liquid Fund
The exit load of this fund is nil. Baroda Liquid Fund was launched in September 2004. The fund is benchmarked against the Crisil Liquid Fund Index.
- BOI Axa Liquid Fund
The exit load for this fund is less than 0.007% for the first six days from the date of allotment. The load is nil after that. The fund was launched in July 2008 and is benchmarked against Crisil Liquid Fund Index.
|Equity mutual funds with no exit load|
|SBI Consumption Opportunities Fund|
|SBI Large and Midcap Fund|
|SBI Magnum Multi cap Fund|
|SBI Nifty Index|
|HDFC Index Nifty 50|
|Source: Value Research|
|As on November 19|
- SBI Consumption Opportunities Fund
SBI Consumption Opportunities Fund is a thematic fund and as the name suggests, has stocks which are more or less related to the broader idea of ‘consumption’. The exit load of the fund is 0.1% till 30 days from the date of allotment and is nil after that.
- SBI Large and Midcap Fund
SBI Large and Midcap Fund was launched in February 1993. The exit load of the fund is 0.1% till 30 days from the date of allotment and is nil after that.
- SBI Magnum Multi-Cap Fund
SBI Magnum Multi-Cap Fund was launched in September 2005. The exit load of the fund is 0.1% till 30 days from the date of allotment and is nil after that.
- SBI Nifty Index Fund
SBI Nifty Index Fund was launched in January 2002. The exit load of the fund is 0.2% till 15 days from the date of allotment and is nil after that.
- HDFC Index Nifty Fund
HDFC Index Nifty 50 Fund is an index fund benchmarked against Nifty 50. The fund was launched in July 2002. Exit Load of 0.25% is applicable if redemption is within three days from the date of allotment. Exit load is nil after that.
Exit load is charged to compensate for your early withdrawal from the fund. The exit load on debt funds and equity funds should not be criteria for decision making.
A mutual fund expects you to stay invested for a long duration. If too many people redeem their money from mutual funds, the mutual fund manager’s decision making is affected as the instability is too high.
Not only that, but the investment of other investors also get affected. Therefore, it is in the interest of the mutual fund and long-term investors to discourage people from redeeming too soon. The exit load is meant to act as a discouragement to people who wish to withdraw their money from a mutual fund.
The exit load is mostly higher for a short duration and lower for a longer-term. In most cases, after a certain period, there is no exit load applicable.
When investing, there are various factors besides the exit load you must consider. Exit load isn’t one of the primary factors to consider. However, if you don’t wish to pay for an exit load on a debt mutual fund, you can pick a fund from above mentioned 10 debt funds.
But remember, avoiding exit load mutual funds will prevent you from choosing good funds.
Mutual funds do an excellent job of handling and guiding your investments. If you want to invest in mutual funds for the short-term, you should invest in debt mutual funds. These mutual funds have lower returns as compared to equity mutual funds, but they are also less risky.
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