Ch.7 · Total Expense Ratio Limits · medium
When exit load is collected from a redeeming investor, where does it go?
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EXPLANATION
Exit load collected from redeeming investors is credited back to the scheme's portfolio, effectively increasing the NAV slightly for remaining unit holders. This is an important protection mechanism — it compensates long-term investors for the transaction costs and potential portfolio disruption caused by premature large redemptions. Exit load is NOT revenue for the AMC.
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