All About Loads

When you invest in an equity fund, you must have noticed that your entry price is higher than the NAV of the fund. When you invest in a debt fund, the entry price is the same as NAV. Why is it so? Well the reason for the difference between the entry price and the NAV is due to a charge called load. This load is not a weighty matter, but is something very simple. The distributor who sells you a fund has to bear expenses towards running his business. A part of this cost is borne by investors in the form of load. A load is thus the charge that an investor pays for the recovery of these expenses. Load can be charged in three different ways. First, at the time of the entry into the fund, by deducting the specified load amount from the initial investm

This article was originally published on October 01, 2003.