Today I saw in the television that government is thinking to apply entry load in mutual fund.
Looking good thing in the sentence but difficult for investor.
Entry load is the kind of expense which is chargeable at entry point of time of the investor. Means when the investor want to invest some amount of money at the same time investor will lose their some percentage of amount at the entry level therefore it is called as entry load, when you investor will enter in to the market the some percentage will be deducted directly. The entry load may be the 2.25% of the amount invested by the investors.
Earlier the entry load was remove by government in the year 2009, and now they are thinking to apply t he same load again on investor.
Earlier situation when entry load was not there.
Mr. A want to invest one lakh rupees in the mutual fund so he can go to the fund house or investment advisor and directly investor will invest in the mutual fund, at that time no entry load or no entry expense charge on the entry in the mutual fund. Investor full amount Is invested. Full 1 lakh rupees investor can see in the portfolio of the investor.
If entry load will charge on mutual fund.
Mr. A want to invest one lakh rupees in the mutual fund so he can go to the fund house or investment advisor and directly investor will invest in the mutual fund, at this time ENTRY LOAD will charge on the entry in the mutual fund. Investor full amount one lakh amount cannot be seen in their portfolio the investor can seen amount after the deduction in their one lakh rupees. When you will see the portfolio immediate after the investment you will see only 97,750 instead of one lakh rupees.