Question

What is the 'FIFO' (First In First Out) method applied to exit load calculation?

Accepted Answer

When partial redemptions are made, units are assumed to be redeemed in the order they were purchased — oldest units first. Units held beyond the exit load period are redeemed first (no load), minimizing exit load for long-term investors — FIFO is applied when calculating exit load for partial redemptions with multiple purchase dates. The oldest purchased units are considered redeemed first. If old units are beyond the exit load period (e.g., 1 year), they attract no exit load. Only newer units within the load period attract the charge. FIFO minimizes exit load for investors who have been holding partially for longer than the load period.