SIP and Exit Load

POSTED BY Ravi ON June 7, 2013 10:14 am COMMENTS (4)

Is Exit Load applicable on SIP investments also?

Most MFs have an exit load of 1% if the units are redeemed within 1 year from allotment. That means if I start a SIP of Rs. 5000 today and redeem it after one year then I am bound to lose . 50 (1% of 5000) * 11 i.e. Rs 550.

Is that true?

4 replies on this article “SIP and Exit Load”

  1. Ravi says:

    Thanks dear Pattu. So in my example, if I redeem all the units that I accumulated over a period, all the units that I accumulated in the last 11 months will face exit load.

    Is that a correct understanding?

    1. Yes all units less than a year old (or any period specified by the fund) will be subject to the exit load

  2. oops. excuse the innumeracy. I meant 100 units!

  3. A sip is nothing but a lumpsum investment made every month. Each transaction is independent. So when you redeem units the exit load will be calculated depending on the age of the units. If you redeem 1000 units and 900 of them are over 1 year old and 10 of them less than 1 year then
    then the exit load will be calculated wrt the value of those 10 units only.

    So
    1% of (NAV on date of redemption X 10 units) will be the load

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Download Our FREE Ebook!

Available only for first 100 people today

Download Our FREE Ebook!

Available only for first 100 people today