Hybrid mutual funds may charge a percentage of NAV for entry or exit. The load structure of the scheme has to be disclosed in its offer documents by the AMC. Suppose the NAV per unit is INR 30 and if the entry as well as exit load charged is 1%, then the investor buying the units would be required to pay Rs 30.30 (Rs 30 + 1% of Rs 30 i.e. 0.30 Paise) per unit. Likewise, those who redeem their units on the same day and the exit load are applied, will get only INR 29.70 (Rs 30 – 1% of Rs 30 i.e. 0.30 Paise) per unit. Currently, there is no entry load in mutual funds that means the investors can enter the fund at the NAV on the investment date and no additional charges are payable.
The exit load charged to the investor is credited to the scheme. The investors should take the exit load into consideration while investing as well as redeeming funds as these can affect their investment returns.