Exit load is the charge levied on exiting the scheme in the initial years and is defined as a percentage of investment. The shorter the holding span, the more likely it is that exit load will be applicable. In 2013, The Securities and Exchange Board of India (Sebi) made it mandatory for mutual funds to offer direct plans. This move, coupled with the growth of online investment platforms offering direct plans prompted a gradual shift among investors towards direct plans of mutual funds among some clients. Even with the abolition of exit load, the applicability of tax still deter many investors from shifting from regular to direct plans.

Source: Mint May 04, 2019 15:11 UTC